Navigating the Greek crisis

Of course, from your sunlounger, the cracks in the Greek economy are unlikely to be too obvious. However, the reality is that the exit of Greece from the euro – the so-called Grexit – remains as likely as ever.

As advisers, therefore, we need to look behind the headlines and avoid being carried away, either by the euphoria that the problem has been solved, or indeed, despair that it remains a distinct possibility.

Our clients look to us, not necessarily to be the font of all wisdom, but rather to be the steadying hand on the tiller. We need to be the calming influence when the media are screaming panic stations, and market volatility moves are giving them sleepless nights with alarming regularity.

Taking Greece as an example, the reality is it has been allowed to borrow more money than it is ever likely to repay, and yet the so-called solution is to lend it more money so that it is even deeper in debt.

Time will tell as to this policy’s long-term success, but in the meantime, we have to manage the financial affairs of our clients in a way which gives them confidence that we can guide them through these stormy seas.

To put it another way, I was like the pilot of a plane, whose job was to get them safely to their destination

Personally, I always found applying two golden rules ensured that my clients were able to sleep more easily at night. The first was that I was their financial planner, not a fund or stock picker; this was the job of the fund managers. To put it another way, I was like the pilot of a plane, whose job was to get them safely to their destination.

In doing so I would take all the care I could to get them there as smoothly and with as little disruption as possible. I did not, however, build the plane, so could not stop it breaking down, nor could I control the weather.

Secondly, financial planning and building security for a client is not a quick fix – it requires both the adviser and the client to take a long-term view, and it is to be expected that there will be ups and downs along the way.

If clients understand these basic facts in relation to their financial planning and your advice, they and you will sleep soundly despite the late night news alerting you to the latest twists in the Grexit saga, or the collapse of the Chinese stock market. You might even get to spend an extra day or two on the sunlounger.

Ken Davy is chairman of Simplybiz