I sometimes get approached by people who are not wanting to go the full-monty financial planning experience. They may be looking for guidance on a specific decision they need to make, or for a second opinion on a strategy that they are already following.
These requests can be tricky to satisfy. The regulations under which financial planners are authorised require that all personalised advice is given in writing. We also have to be certain that the recommendations are in the client’s best interest.
To me, this makes good sense.
If you were visiting a friend’s home and they asked you for an opinion on whether to knock down a wall between two rooms, the only thing you could say with any certainty is that it would make a larger space. It would take further questioning to know whether this would be of benefit to them. Does their lifestyle need less larger rooms, or more smaller ones?
If you happened to be a structural engineer, you might take it to the next level. Would removing the wall affect the integrity of the house? Would the roof be likely to fall in? Would they need to make other modifications to make it workable?
If you were really keen, you might look under the house and discover that there is a termite infestation. You might suggest that they spend their money fixing this first before considering a renovation.
The point being that sometimes a quick answer is not the best answer. Great decisions may need a bit of research to make sure the foundations are good and solid.
For the consumer however, this can add extra complexity and cost to something that appears to them to be quite straight forward. It sits with the adviser to find a balance between providing high quality advice and meeting client expectations. I remain a strong supporter of comprehensive advice and a long term adviser relationship.
And for those who would prefer not to know that their house has termites? (that is another story).
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© Summation Strategies 2018.
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