The Value of Financial Advice: What the Royal Commission Missed
Recently I had the pleasure of spending time with dear clients who I have been working collaboratively with for the past 20 years. Wow, 20 years where has the time gone.
By way of background, when I first met them, they were your average types. Lovely people doing their best in what was a busy world, to build a life, raise a family and if possible build a decent nest egg so that they could one day enjoy the fruits of their labour. What struck me most about these clients was their humility, they simply just got on with the job of doing. Sure they played important roles but never once did they let this get in the way of their value set.
Well as the story goes, these average types were nothing of the sort.
The husband was a high powered executive who by careers end was playing a lead role in one of Australia’s top ASX listed companies. An incredibly capable individual who would dissect strategy and deliver solutions not only in Australia but on a global scale. A true master.
The wife too was equally capable but in an entirely different role. Her focus was on family and on providing an environment where they could grow. It was about building a safe place, filled with love, self-respect and empathy for others. Being driven was encouraged but so too was being vulnerable. Like her husband, she too, was a true master of her craft.
In recent times, these average types have decided to call time, take a step back, smell the roses and enjoy the fruits of their labour. Whilst only partially retired, they have travelled extensively, spent time with those who matter most and found purpose in other pursuits which now provide them with great joy. A success story by all accounts.
Whilst speaking to them recently we got onto to the topic of the recent Royal Commission.
Yes the findings were horrendous. In fact they were inexcusable. Australians deserve better. Having placed great faith in certain institutions, many consumers were left disillusioned and worse still unable to achieve what mattered most.
As an industry we need not only to accept these judgements but we need to be better. We need to commit to a better world, one where the client’s best interests are sacrosanct, one where perceived conflicts are removed, one where the advice is aligned to client outcomes.
Whilst my clients agreed with many of my observations they offered a different perspective. Yes well known organisations had failed miserably but their experience was different and the Royal Commissions failure to recognise this was an opportunity missed.
Intrigued, I asked my clients to provide further context as I was keen to understand what they meant.
For them, they viewed our relationship as a life-long partnership. Like all partnerships, there are good times and bad but what they never lost sight of what was the value that we provide.
In their view, the benefits of our engagement were as follows:
Leadership, strategic guidance and goal clarification
We made an effort to understand who they were and what mattered most. We invested time; we asked thought provoking questions; we listened intently; we challenged; we educated; we explained but even more important we guided them through, and still do, what is a complex financial world.
Forest Gump famously said “Life is like a box of chocolates. You never know what you’re going to get”. For our clients, we provided empathy, emotional support and a different perspective when bumps in the road would emerge. A voice of reason offering clarity and helping to restore confidence when hope seemed lost.
The sophistication behind a financial plan is often underestimated. This is because much of what is said or being built is intangible and only apparent after the passing of many years. As explained by my clients this required a leap of faith, a leap made far easier due to the expert skill of our team and its ability to demystify what appears complex in simple to understand language. Knowing what and why provided a greater sense of control.
Time, our most precious asset. For our clients who have always lived busy lives, the chance to outsource their financial affairs to a trusted partner meant that they were now free to do other things; things that were more enjoyable; things that they were more passionate about; things that mattered most.
Investment markets, like life, is full of uncertainty, which makes it easy to lose sight of what are your long term goals. Having a trusted partner, who understands you intimately, who sits on your side and acts as voice a reason even when your emotional biases are telling you otherwise has been an enormous benefit to them.
Ongoing discovery and pain point identification
Goals change, attitudes change, relationships change. Life is unpredictable. Having someone who can stress test scenarios and bring your attention to problems not yet envisioned has meant that they have been able to face challenges head on with courage and above all else a sense of confidence. This has led to better decisions, better outcomes and most importantly a better life.
For those who know me, you will agree that it is not often that I am left short of a word. But it was at this point that was truly gobsmacked. For 26 years I have often questioned the value that we provide. Knowing it to be real but unsure who to articulate it.
Yet in fifteen simple minutes, these clients with whom I have shared a wonderful relationship with over the past twenty years, were able to articulate exactly what it is we do, the real value we provide, the very points that the Royal Commission missed. The true value of advice and why it is essential that every Australia seek it.