Financial planning: Supermarket sweep

Traditional financial advice treats you like a supermarket customer

Influenced by traditional financial advisers, most people only buy a financial product as a reaction to a life event.  They might move house and buy a mortgage; change jobs and buy a pension; have children and buy life insurance; or they might read in the financial press that gold funds will grow at 20% minimum every year and invest all their money there. This series of uncoordinated events results in a trolley full of plans.

Will you have what you need at the check out?

The problem is there is no form of measurement until it is too late.  You reach the check out at retirement and hope that you have enough in your trolley to last you through.  Or something goes wrong on the way to the check out (such as an illness or accident) and you have to rummage in the trolley in the hope that there’s something there to deal with the problem.

This retail service is flawed

Even in the best hands financial advice delivered this way will be at best reactive and almost always result in the sale of a product.  In the worst hands this service can lead to biased and expensive advice; with no measurement of how far the existing arrangements will get you towards your objectives.

Advice not products

Because you are buying policies, the people who deliver the traditional advice service to you tend to get paid according to what they sell.  This payment method works in most retail environments. But we think most people go to a financial adviser for advice – not a shopping trip.

The alternative is financial planning

A financial planning service is more comprehensive and proactive.  It equips you with the tools you need for your financial journey through life.  Crucially it measures your progress.  Your Financial Plan shows you how much to save or spend; to invest or repay debt; how fast your investment needs to grow, the right investment mix you need to live your desired lifestyle. Very often a financial planning service will recommend you avoid or get rid of financial products. So the service needs to be fee-based to protect your confidence and trust in the impartiality of the service. Please call Tim or Stephen if you would like to know more: 0845 345 6282.