When people think about financial advice, technical expertise often comes to mind first. However, after working with countless clients, I’ve learned that while competence is essential, it’s just the foundation of truly valuable financial advice.
The Foundation of Competence
Technical knowledge and qualifications are table stakes in our industry. Just as you wouldn’t trust a surgeon who says “I haven’t done this before but I’ll have a crack at it,” clients rightfully expect their financial adviser to have the necessary expertise. However, this alone doesn’t differentiate great advisers from good ones.
Making the Complex Simple
Convenience is where advisers begin adding unique value. Many clients might figure things out themselves through research and Google, but they simply don’t have the time. For busy professionals especially, having someone coordinate their financial affairs, liaise with other specialists, and distil complex information into clear actions is invaluable.
The Critical Role of Coaching
Perhaps the most underappreciated aspect of financial advice is coaching. When markets are volatile or major life changes occur, having someone to guide you through emotional decisions becomes crucial. This includes offering second opinions, challenging assumptions, and sometimes simply keeping clients “in their seat” during market turbulence.
As an adviser, I’ve found that coaching often involves managing client emotions during times of uncertainty. For instance, during the onset of COVID-19, markets plummeted initially but then rebounded strongly over the following 12 months. I recall a story of a high-profile advisory firm overseas that converted 90% of their portfolio to cash, fearing a long and protracted recession. While this decision was meant to allay investor fears, it ultimately caused them to miss out on the subsequent market upswing.
This example illustrates why staying invested over the long term, despite short-term volatility, is often the best approach. As advisers, our role is to help clients understand that market resilience has persistently occurred over time, even in the face of unexpected events. By sharing these experiences and providing historical context, we can help clients maintain perspective and avoid making rash decisions based on fear or short-term market movements.
Building Continuity
The fourth pillar extends beyond individual clients to their families. Many couples worry about what happens if one partner passes away. Parents wonder how their children will manage in today’s economic environment. True financial advice provides continuity across generations and life transitions.
The real value of financial advice emerges when these four elements work together. While clients might initially seek out an adviser for their expertise, they stay for the convenience, coaching, and continuity. As one colleague noted, “The only people who know how valuable advice is are those who’ve experienced it.”
If you have never spoken to a Financial Adviser, but feel we might be able to help, reach out to us for no-obligation discussion.