At Blue Sky, we have been helping clients undertake financial planning for many years, enabling them to see the bigger picture. We encourage them to see beyond their next holiday or big event and do our best to remove their anxiety and worry around money.
We put to bed those old wives’ tales and work together with the client, re-shaping pre-conceived ideas. We strategise to obtain desirable returns on capital and make sense of all those policies. In essence, we educate clients about what’s possible and help them create goals; empowering them to live their life to the full. Convincing clients to enjoy their money whilst they have good health, with confidence, in the knowledge that they will never run out of money: that’s the power of planning.
Last week, following a successful presentation and the modelling of various scenarios to new clients, the wife in question, turned to me and asked “why doesn’t everyone do this?”
We ended up discussing some salient points. We spoke about their friends and family, and the reasons why people in general don’t engage in financial planning. Here’s what she thought:
Reason 1: I can do it myself.
Our client’s comment: “We have a share portfolio which we used to manage and follow until there was a market downturn and then we stopped looking at it once we started to lose money! We quickly realised that you can’t really dip in and out of this stuff. We simply haven’t got the time, nor inclination anymore.”
With regards to financial planning and co-ordinating the bigger picture, my client added “we have always managed our finances quite well but realised that we were approaching a juncture whereby we needed professional expertise. We were looking for someone to challenge our thinking and to see if we were missing something.”
In my experience, most people aren’t proactive; they are reactive. It’s all about taking control. Part of the role of a great financial planner is to challenge, to mentor and to act as a conduit for change. We’re meant to make sense of what is happening, deliver confidence and remove anxieties.
Reason 2: Our situation is quite straightforward.
Our client’s comment: “This was very much our train of thought. Yet we have come to learn that we actually have very limited knowledge. We thought it was straightforward but we only know what we know. We have understood today that so much more is possible.”
All we have to do is ask a few questions and more often than not, it soon becomes obvious that potential clients have huge gaps in their knowledge. Access to the Internet may aid understanding in certain areas but it doesn’t create bespoke strategies in which you can have complete confidence!
Reason 3: It’s too expensive.
Our client’s comment: “We strongly believe you get what you pay for. If we could do it ourselves we would, but you’ve clearly demonstrated why we need professional help. It’s about value. We can see how Blue Sky can make a difference to our situation by bringing in other points of view and other ways of going about things.”
I’ve stated in the past ‘why pay for professional advice when amateur advice is free!’ Perhaps a tad facetious of me, but there is no doubt that a good proportion of the population isn’t used to paying upfront fees for financial planning. They are more used to being sold products.
I love this analogy from Brett Davidson at FP Advance about his own price sensitivity on holidays: “If I’m going on a short haul flight I don’t mind it being cheap and cheerful. I can endure that. It’s a different matter when I’m going on a long haul flight. I consider the experience to be more important.”
Think of Blue Sky as the ‘Long Haul’ service specialist.
Reason 4: We’re not ready for this yet.
Our client’s comment: “We hear lots of family, friends and work colleagues putting this stuff off. Easy to do as life is so busy! We have been guilty of this ourselves – we probably should have done this financial planning 5 years ago! You are right when you say most people don’t look beyond their next holiday.”
We are all guilty of inertia, in so many spheres of our lives. Planning is all about goal setting and then working out how to get there. Many of us have to do this at work and in our businesses but we neglect to plan for ourselves and our family.
Reason 5: Fear
Our client’s comment: “You shouldn’t underestimate how much it takes for people to do something about their situation. We deliberated for 5 years or more! It’s funny, when we first met you, we immediately felt at ease and more relaxed. But we have to be honest; we thought we might look foolish. We thought you might be more judgmental about our situation. Then there was the worry that you might try and sell us something. Far from the truth as it turned out!”
Fear is a huge block for most of us, and at Blue Sky we understand it’s a big issue. Our work is about confidence but it’s also about educating people about the need to plan. People like the client who shared these thoughts are the key… advocates of planning.
I hope some of this resonates with you. A big thank you to my client for sharing these thoughts with me.
The question now is do you have a Comprehensive Financial Plan or are you just focusing on the short term?