Do you manage your own finances in the same way you manage your clients’ or is it more ‘do as I say not as I do’?
I say this because I have seen a few comments this year from peers on how they manage their own investments and pensions, moving the money around, maybe trying to time the markets, or just holding certain funds.
Often these come with the comment: “I wouldn’t do this for a client.”
Why not?
If you think it is the right thing to do, why would you not recommend clients to do the same? Subject to the usual caveats around risk and suitability of course.
Way back in my early days I had a national sales director who told us as new recruits: “If you wouldn’t recommend it to your mother, don’t recommend it to the client.” By extension I would say the same thing applies: if you would recommend this to your mother, or yourself, you should recommend it to your clients.
If you think it is the right thing to do, why would you not recommend clients to do the same?For myself I hold exactly the same plans and portfolios I recommend to clients – and so does my mother, since you ask. I am happy to tell them that as well and even show them too. I have, as the saying goes, ‘skin in the game’, and I find it helps to build trust with clients if I’m doing the same as I’m recommending to them.
I think this goes not just for how you manage the money but the planning aspects as well.
Do you actually have a financial plan? Do you sit down regularly and update it? Do you have your own cash flow plans? Have you discussed with your partner what your short and long-term motivations are and how you intend to achieve them? Do you have a financial planner?
I also moved a couple of years ago from setting financial goals for myself and the business to setting life goals for the year – things we wanted to do as a family and experiences we wanted to have, because that is how I try to encourage clients to think. ‘This year we will do X’, rather than ‘This year I will earn X’.
In 2020 that has been rather more difficult but in 2019 it made a huge difference to us as a family, and how many things we did we might not have done otherwise. Hopefully we will return to that in 2021.
We help clients to live their best lives; take a bit of your own medicine and do the same for yourself and your family.
Darren Cooke is a chartered financial planner at Red Circle Financial Planning
