The benefits of asset accumulation

Most financial advisers today have come from an industry that started in product sales and that background is hard to extinguish; it’s natural to sell a product.

Most people who avoid seeking financial advice do so for one or more of these six reasons:

  • There is no obvious benefit
  • The cost of advice and affordability
  • The time involved
  • Past experiences of their family and friends
  • The negative opinion of others
  • Financial advisers are sales people

To make a positive difference in people’s lives is to ensure they know that ‘asset accumulation’ to produce income is their primary goal. This income is needed to replace their employed income at some future time.

For example, plumbers are required to stop leaks, to improve the water supply to your bathroom, to resolve drainage issues. In fixing these problems they do not discuss the tools of their trade, they only fix the problem. Surgeons don’t talk about their tools, they talk about the health issue and the outcome following surgery. They do not speak of forceps, clamps, occluders, retractors, distractors, positioners, and stereotactic devices. Some of these tools you will never have heard of, and that is the point. Clients have needs, financial advisers should focus on mending those needs with outcomes. The surgical instruments are all tools of surgeons and equally products and policies are tools of financial advisers. You should not talk to clients about the tools of your trade – the products and policies are used to solve a need.

There is no longer a need to discuss products such as personal pensions or individual savings accounts as these are tools to accumulate assets. Financial advisers need to stop talking to clients about financial products. It’s too easy to try to gain credibility by speaking to clients about ISA rules or pension freedoms, limits, restrictions, or what is and is not allowed. Instead, set aside the product discussion and talk about what really matters; are they saving enough?

Targeting problems and goal setting is essential in making a positive difference, and the Happy Financial Adviser focuses on just two issues:

  1. His/her client does not have enough assets to retire (the insufficient) or
  2. Her/his clients has more assets than needed (the sufficient)

Only when this is established can a solution be discussed. One has the need to save, the other has a need to gift. Keeping this simple differentiation will encourage your clients to seek solutions and with your help and advice, allow them to start to plan. If you can get this important message to your clients, it is a little win towards making a positive difference. The insufficient client will appreciate the simplicity of having a clear target and plan to achieve it. the sufficient client will understand the need to gift and start to plan for it. It’s about making your clients aware of the big picture. How they save or how they gift is where the advice process starts and that’s where your skills are required.

Become an adviser for Truly Independent

We are always on the lookout for new passionate advisers. If you are employed as a financial adviser, are already self-employed maybe within a financial advice network, or perhaps a director of a small Directly Authorised firm and facing an uncertain future and unhappy…. then register for a Discovery Session. In these sessions, we will delve deeper into your current situation, discuss your ambitions and identify the barriers that are preventing you from being happier. Click here to take your first step to become a happier financial adviser and book your session at a time and date that suits you.