Recently, some big-name institutions have rolled out initiatives to promote a goals-based approach to financial advice. AMP, for example, has launched a new online tool, while IOOF has rolled out an adviser training company to help advisers adopt a goals-based client engagement model.
This is similar to the theme of the FPA’s ‘Dare to Dream’ campaign for Financial Planning Week.
“Financial planning is about so much more than solving money problems,” FPA chief executive Dante De Gori said.
“It is about identifying life goals, hopes and dreams – and mapping a financial path to achieving them.”
For some advisers, however, the recent hype just sounds like old news.
“I can’t speak for all practices, and I can’t speak for all big businesses either, but when you see these guys saying ‘we need to move towards goals-based advice’, it’s quite shocking because that’s what financial planning is – it’s about aligning somebody’s needs and goals,” Katherine Hayes, adviser at Tiffen & Co, told ifa.
“It really begs the question: if you haven’t been doing that all along, what have you been doing?”
Roskow Independent Advisory’s Matthew Ross added that “this isn’t a new movement”.
“Bill Bachrach from the United States has been mentoring advisers on values-based financial planning for decades and the goal-setting process has been at the heart of that way of planning for all that time,” he said.
Nevertheless, Ms Hayes said that while the bigger companies might not be leaders in goals-based advice, it is encouraging to see them focus on this approach.
“I think campaigns and movements like these are really good because a lot of clients really struggle to understand what it is that a financial adviser can do for them, so I think anything that’s going to take away the hurdle or apprehensions that someone might have about seeking advice – I think that’s really important,” she said.
Mr Ross echoed Ms Hayes sentiments, saying, “I think it’s really positive if they back it up with the structure for giving advice that independents have been doing for years.”
Goals based planning is great when a plan is provided that clients can see and follow. The problem with such plans like funding for retirement is that they are mostly somewhere in the future and seems so far away and out of reach when compared to the clients most immediate needs.
Until you solve their current day need, you can’t get them to think the future is even remotely possible.
The problem with institutions coming out with this sort information just goes to prove they are always behind the 8 ball and not in touch with the real world. Clients don’t want your product. They want a solution.
Clients don’t want a salesperson or adviser, they want a partner.
Waste as much time effort and money on coming up with useless programs and ideas, but until you are able to engage the customer on their most immediate need, then you cannot possibly get them to think beyond their next pay day.
But … there is a solution!