Your Financial Adviser Is Your Critical Friend

financial advisers

Your Financial Adviser Is Your Critical Friend

| |

4 minute read

Andrew Meyer runs his personal training business from a gym in London. He primarily spends his work time standing in front of his clients and counting to ten.

Clients pay Andrew their hard-earned money to do something they could essentially do themselves, at home. Lift heavy weights and count from one to ten. Everyone knows there are countless personal fitness videos on YouTube. Furthermore, dozens of apps and thousands of online articles can give you additional tuition. So why do so many people employ a personal trainer?

Here’s the skill that the personal trainer can bestow their client that no other online platform can achieve; accountability. The morning alarm sounds at 6 am on a cold winter morning, at this point, it’s purely knowing that Andrew is at the gym, waiting and ready to put them through their paces that hauls them up out of their warm bed, and out of the door.

Data from the Health Survey for England (HSE) retrieved in 2018 inferred 31% of adults in the U.K. were clinically obese, with a Body Mass Index (BMI) greater than 30. Moreover, 63% of adults are deemed as overweight or obese (a body mass index of 25 or above), compared to 53% back in 1993.

Everyone is aware that exercise is good for you, yet a staggering 63% of the population is overweight. We know the facts; we just don’t all follow through with the necessary activity. Therefore, we can say that knowledge does not always lead to action.

The purpose of this article is not to focus on fitness, exercise, and gyms. It is to elucidate the benefits of having your own financial coach to walk through life with you. A professional individual, who holds you accountable and keeps you in good financial shape. A long-term relationship with clear goals, based on trust.

Global Economic Meltdown

For the sake of an example, consider a client called Chris. He employs a financial planner called Sarah who he has known for years. Chris is a lovely guy, extremely talented, and runs a film production business based in East London.

He’s been relatively successful in his career and thus has saved significant private wealth. Some of his assets stand in property and some are managed by his financial planner as what he refers to as his family fortress; his safety net if the unprecedented should occur.

Chris is laid back, but the current global crisis created by C-19 has him spooked. He’s been on a few calls with friends ‘in the city’. One works for a hedge fund and has convinced Chris he needs to sell his portfolio and buy ‘Asian bonds’ (whatever that means).

Then his father-in-law sent him a link to a YouTube video outlining a complex conspiracy theory about the origins of C-19. This did not help to reduce his blood pressure.

Sarah spoke with Chris, listening to his concerns. Sarah asked Chris to clarify what he meant, and what his opinions and preferences were around investment now. She asked him to update her about his business, his family situation, and how he saw the future panning out. He talked for 30 minutes and Sarah listened carefully, without interrupting.

Don’t just do something, stand there

Sarah asked him to trust her and do nothing. That’s right, not to do anything. Not to sell the investment portfolio, that was designed for Chris in calmer times. No to change the structure, and ultimately, not to contemplate this unsettled market as a buying opportunity.

Sarah asked him to remind her about what the investments were intended for and when they were planned to be utilised. She asked him if his plans had changed, the same plans they had discussed, and comprehensively reviewed at each of their meetings over the last several years.

Chris took a deep breath and agreed that, on reflection, nothing had changed. The investments were there to support his family lifestyle over multiple decades, they had never been intended as short-term opportunities.

Sarah helped Chris to realise that in fact, what he owned was a globally diversified investment portfolio. His assets were not in the form of some shapeless pot of stocks and shares. His wealth was held in a mass of more than 8,000 global companies that encompassed first-class businesses like Microsoft, Tesla, Apple, BMW, Amazon, and Disney.

Each one of them led by some of the smartest and hardest-working executives on the planet. All committed to growing their business, generating profits, improving their share price, and paying income to him, as a shareholder.

Sarah reminded him that he was invested in human ingenuity and that this was not something to suddenly oppose. Nobody can predict what the future may hold, not even his wise friends. Humans have a long track record of getting through even the most difficult of circumstances.

Sarah explained that although the future is uncertain, her views are guided by 200 years of documented economic history. Despite the human impulse to just do something during a crisis of confidence, Sarah repeated her advice to sit tight and do nothing.

Your Financial Coach and Critical Friend

One of the most pivotal roles that financial planners hold in their client’s lives is being a crucial friend. That individual who will politely tell you that you have spinach in your teeth.

They act as your accountability coach and, when necessary, will explain the difficult truths and avoid fobbing you off with comforting lies. The easy wins; buy gold, buy bitcoin, apartments in Dubai, Jojoba plantations in Central America, and invest in your friend’s start-up tech company. In the get-rich-quick stakes, you are sitting on the wrong side of the table. If it sounds too good to be true, in finance and investments, then too often it is too good to be true. Your financial coach and friend, however, will be there to navigate you away from the ‘get rich quick’ schemes, steering you toward long-standing wealth.

Aside from your immediate family members, you will not find a person who will be more concerned with your financial wellbeing than a trusted, professional, financial planner. They ask you to trust them which can be daunting and sometimes, they ask you to do nothing. Yes, this can be alarming too, but if you consider this, no financial advisor worth their weight in gold would want to coach and partner you through a journey of financial self-harm.

As Naval Ravikant remarked when reflecting on what society is missing from the current C-19 lockdown, ‘People don’t just go to restaurants to eat, they don’t just go to church to worship, and they don’t just go to offices to work’. There’s more to those activities than the base utility.

In a similar vein, fitness clients don’t hire Andrew to count to ten and clients don’t hire financial planners to design an investment portfolio.

Sometimes we do things because we’re human, and we need others to protect us from ourselves or to coach us to bring out the best in us and our assets - even if it means doing nothing.

Interested in this article?

Why not speak to one of our helpful advisors today to discuss how we can help you

Speak to an adviser today

Sign up to our blog

Each month our expert team create insightful content to help you navigate the world of personal finance. Sign up now to be the first know when we have a new article available.

Related Articles

Here are some similar articles we think you'll find interesting.


What is evidence-based investing?

by Chelsey Southern

If you went to your doctor with a complaint, how would you expect them to make a diagnosis?


What is evidence-based investing?

by Chelsey Southern

If you went to your doctor with a complaint, how would you expect them to make a diagnosis?


10 frequently asked questions that will help you start to understand your pension choices

by Chelsey Southern

Considering the rules and regulations that govern them, dealing with your pension can throw up many questions.