The views expressed in this article are those of the author and reflect the point of view of Fiducia Group. The article was provided by Fiducia Group to the Beacon Gainer private client advisory services group.
Now picture this: it’s raining, you’re running late for a meeting, the parking meter only accepts £1 Coins and you don’t see any alternative options around.
Or perhaps, you are at the supermarket for your weekly shop and you don’t have a coin for the trolley!
Would you be willing to pay £2 for that £1 coin in the search for comfort? Probably. Even though the price is £1, the value attained is more than a pound.
In financial planning, people are generally concerned about the cost of receiving sound financial advice. The initial cost can be a hurdle to accept, especially when you hear negative stories surrounding adviser fees.
As an adviser, my primary objective is to help my clients focus on the real value in the longer term, by using various tools and understanding those deep personal motives that adds quality and peace of mind.
The price, or the cost, of advice is measured in numerical terms (currency) but the value varies from client to client. Most clients want to explore specific areas, such as investment strategies, tax efficient plans and clever pension tactics, with a view to gaining some sort of financial advantage. However, what I find upon further questioning is that most clients are seeking a degree of financial freedom that will afford more meaningful benefits, such as spending time with their family, grandchildren or travelling the world before it’s too late. For them, financial freedom means enjoying a stress-free life doing what they love.
A recent case with an existing client provides a good example. His sole objective was to not have his early morning alarm wake him up for work five days a week. This client is now happily retired, and yet still sets his alarm to get up at 10:00 AM! He has established his financial freedom – a sleep-in!
The reality is that wealth plays an important role in today’s world and is necessary to meet certain objectives and comforts. Smart and effective financial planning can help you achieve your personal goals in a timely manner, but it comes at a price. The value of sound financial advice should always exceed the overall cost of the advice given. In fact, my belief is that financial planning is not about savings and investments at all, it’s about spending! The real value is achieved when wealth is used to do things that you love, when you spoil your grandchildren without feeling any financial pressure, when you can book a holiday during school holidays without worrying too much about increased air fares or when you have the capacity to engage in voluntary work to help people in need. Quite possibly priceless.
Once clients realise that the benefits are likely to outweigh the costs, then advice is no longer seen as expensive and the price becomes a secondary concern to the added value benefits.
I take great pride in observing a transparent fee and charges structure right from the start, thus preventing any unwelcome surprises. If I concentrate on the outcome, I won’t have to worry about the income.
“Price is what you pay, Value is what you get” – Warren Buffet,