Could there be a worse time to start a website advocating the benefits of financial advice?
Financial markets down 30%. Volatility at record highs. Seems a weird time when people are panicking. Talking about the next depression. Running to cash. Watching their previously indestructible investment strategies blow up.
For some it’s a challenge, but it’s not doom and gloom.
Back in early March, I took the above picture of David Andrew, founder of Capital Partners, speaking at the FYG Planners conference. Not the greatest picture. Gloomy lighting and poor photography skills, but it’s a great message. I believe the ASX fell 7% that day. Good advisers became even more valuable.
I imagine it’s a great time to be a financial adviser everywhere – if you’re doing the right thing and if you’ve done the right thing. If goals are first. If there’s a plan backing those goals. If there’s an evidence based investment process behind the goals and plan.
Many advisers are able to point to the data and say, “this is what we know and this is what we don’t know”. They’ve put goals and planning ahead of markets and returns. Real goals, not returns as a goal. They’ve built portfolios according to those goals and plans. Their clients know the possibilities of the good and the bad. They know how portfolios will react in various scenarios.
They’ve leveled with their clients. It’s a message of resilience and optimism.
In contrast, if the goal was returns, maybe it’s not a great time to be a financial adviser. A lot of fair weather investment strategies will be exposed. Instead of referring to a guiding set of principles, those advisers will be jumping to the next quick fix. Taxes. Transaction costs. Explanations on why the last strategy failed and why the next one will work.
It’s a great time to be a real financial adviser. It’s a great time to be an evidence based financial adviser.
This represents general information only. Before making any financial or investment decisions, I suggest you consult a financial planner to take into account your personal investment objectives, financial situation and individual needs. Don’t make financial or investment decisions on the basis of blog post or sourcing advice from internet forums, if you’d like a introduction to investing, please consider reading Your Investment Philosophy, which offers an evidence based primer for building your own investment philosophy.
