OpinionNov 8 2021

Don't leave everything for a rainy day

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Don't leave everything for a rainy day

I was reflecting on the recent death of the brilliantly funny Sean Lock and was watching a few clips of him at his best, including the show just after the news broke about Jimmy Carr and his tax avoiding.

Lock’s line was: "We all like to put a bit of money away for a rainy day Jimmy, but I think you are more prepared than Noah."

It reminded me of the client I spoke with many years ago; her parents were mid-70s, both retired and collected their state pensions weekly from the post office and lived a frugal life on those. They both had company pensions paid directly to a savings account and had never touched a penny since they had retired. As you can imagine, it had accrued a fair sum.

She had tried to get them to spend some of the money on themselves but just got the reply: "It's our rainy-day money."

"But dad, you are 75, how many rainy days are you going to have?"

Right there is the perfection of what we do.

As a wealth manager I think you only do half the job if you look after people’s money and help to make them richer. They may gain comfort from being richer, which they can perceive as being happier, but few people are actually truly happy just by being richer and looking at a bigger number on a piece of paper – well, unless they are Scrooge McDuck.

A financial planner should explore with a client what they actually want from life, discuss their hopes, dreams and aspirations for them and their family and then help them plan their finances to achieve as much of it as possible. Yes, that will involve managing the money, but it will be to achieve what the clients want, and not just maximising returns.

Financial wellbeing is when we help a client live a life full of meaning and purpose. Fully exploring with them what will bring them real happiness and a sense of fulfilment in their lives. Not just being able to buy the latest shiny thing or nicest car, but real, long-lasting self-worth.

That will be different for every single client, for some it may even be to carry on working for as long as they can.

Once we truly understand each client, and what makes them tick, then we can help them attain as much of that as possible and help them manage their finances and give them the freedom and permission to enjoy life.

True financial planning should be about making clients lives richer, not their bank balance.

Darren Cook is a chartered financial planner at Red Circle Financial Planning