I thought you had to be rich to have a financial adviser?

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We had a friend staying last weekend. I’d just got back from a 2 day conference and was engaged in a rant about the forthcoming Pension “Reform” (this will be the subject of a future blog but it’s currently in its 84th edit and I can’t seem to make it any less ranty) whilst glugging wine with unseemly haste at our local. At some point, probably when I paused for breath or more wine she said “I always thought you had to be rich to have a financial adviser?”

Now I’ve never been one of those “I won’t get out of bed for less than a half million pound pension transfer” types of adviser, so that took me slightly by surprise. Having thought about it, however, I’m less surprised as I suspect that a great number of people aren’t aware of the role of a proper financial adviser/planner. Unsurprising really when for so many years the financial services industry has been populated by oiks in shiny River Island suits trying to flog you a product. The industry is spending millions of pounds and hours trying to move away from a commission driven environment (and not a moment too soon in my opinion). The pounds and hours have been neatly parceled up into a revelation known as the Retail Distribution Review and if I’m feeling particularly cruel one week I might tell you all about it.

Anyway, back to this myth that you have to be rich to have a financial adviser. I think it’s tied up with another myth – the one about only needing an adviser if you have investments. Of course, the “I won’t get out of bed for less than a half million pound pension transfer” guys like to fan the flames of this one because it makes them feel big and important. This is patent nonsense and yet for some reason nobody in financial services seems to be brave enough, or enlightened enough to say no, actually it’s simply about having somebody to help you make a plan, stick to it and revise it as and when necessary. In essence, we provide a nagging service.

Unsurprisingly, women are far less product driven than men. Research from the Chartered Insurance Institute shows that what women want is advice from somebody that they can relate to, about issues that are important to them, in language that they understand. They also want somebody to act as a mentor in the implementation of the plan. Not the current product driven offerings from the patronising man in the River Island Suit. It seems that the move towards an advice driven fee based model will be welcomed by the girls at least!

This is a male dominated market at the moment, offering products designed by men, with men in mind a great deal of the time. Add some gender stereotyping to that with the “Women need to wise up about money” headlines and the suggestions that we’d rather spend £300 on a new frock than invest it sensibly in our pension plans, it’s no wonder we need to pull the whole damn thing down and start again.

I’ve digressed again. No, you don’t have to be rich to have or indeed need a financial plan, and some help to implement it. Hopefully part of the plan will be to create some capital wealth in the future, but the main point is to have a “financial health plan” and somebody you trust to help you handle any disruptions along the way. It’s not expensive to do this, but it can be very expensive to undo the damage of a badly flogged product that you don’t understand.

Kate

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