Several weeks ago I rang a client to arrange a review of his investment portfolio. He and his wife have been retired for a few years now and are enjoying a comfortable retirement in a quiet seaside town. Like all good financial planners we have been keeping clients up to date with regular reports and newsletters.
The fallout from the global financial crisis and continued uncertainty has made most clients nervous about the security of their investments. It’s made financial planners even more nervous with falling investment values and fear of losing clients in such volatile markets.
You will gather from my previous posts and articles that I am a strong advocate for financial education. I believe a financial planner’s role is not just about managing investments on behalf of clients but more about teaching clients to take responsibility for their own financial future through proper financial education.
Financial education is important because the aim of most people is to lead a full and rewarding life culminating with an affordable retirement lifestyle that has been years in the making. For most people, that means making the right investment decisions along the way, or at least minimising the bad ones, and the secret to that is about having the knowledge to make as many of those ‘right’ decisions as possible. It is not about handing over that responsibility to a third party or trusting someone else to make those decisions for you. It’s about having control of your own finances and understanding what, why and the risks of any investments you are in. Nicolas Cage will attest to that. He lost everything by handing control of his investments over to his financial manager.
But, I’m transgressing, so let me get down from my bandwagon about financial education and get back to my client and the reason why the world needs financial planners.
On speaking with the client we enjoyed the normal pleasantries and general discussion about the upcoming Christmas period. My desire to keep the clients informed on their investments and what was happening in the finance world was the motivating factor for my phone call and request to meet before Christmas. We’re not talking about a small investment here either. This is the culmination of a lifetime’s work and savings all rolled together to provide an ample passive income for the rest of their lives.
To my dismay, Ted ( I’ll call him Ted, but that’s not his real name) declared that he was too busy leading up to Christmas to have any meeting to discuss his investments. He went on further to suggest that unless I was recommending any changes, he could do nothing about the world or the financial markets so was happy just to leave discussion on his investments until his next formal review in April next year.
It was at that point why I understood the reasons why the world (and Ted) still need financial planners.
Apathy and fear.
We can preach all we like about the need for people to take control and responsibility of their own finances but there will always be people who can’t be bothered, or choose to adopt a blasé approach to their investments. For many, it may be they feel the finance world is too complicated, so they pass control of the decision making process over to their financial adviser or third party. Perhaps they feel more comfortable because they’ve got someone to blame when things go wrong.
Whatever the reasons and despite my desire for people to take control of their own finances through proper financial education, there will always be people who don’t care, don’t want to care, or are too afraid to care and that’s the reason by the world will always need financial planners.
Rob Bourne has been involved in the financial services industry for over 35 years. As a practising financial adviser he focuses on the need for practical and down to earth financial education. The aim is to educate people through financial education so they can take control of their own financial future. Visit Rob’s website here for more information on business opportunities, investing and financial education.
