We Financial Planners get a lot of stick for only ‘helping the rich get richer’. Exclusively making money for individuals who already have money. Which for a variety of personal, political and moral reasons, people seem to have a problem with.
So is it true? Is that really all that financial planners are good for?
To some degree, yes. We can’t deny our clients pay our fees to help them navigate past easily avoidable tax traps, and/or, help them to grow their investment funds. So via tax savings and investment growth, we do help people who have money make more money.
But is that necessarily a bad thing? Who are these people we’re helping and where do they come from? Are they slimy bankers, driving Lamborghinis, investing their £250k bonuses each year? Nope. Most of our clients are either approaching retirement or have already retired. Typically they are individuals who have worked their entire adult life. Often accumulating considerable wealth by making smart decisions. We have no problem assisting these people in navigating their finances to get the most out of their hard-earned cash. In fact, it’s highly gratifying work that drives our vision – ‘Transforming Lives Through Big Picture Planning’. We want to show people that they can have more and can do more, which ultimately improves their quality of life.
That said, we’re not oblivious to the ever-increasing ‘advice gap’ between the people who need financial advice and those who can afford it. We’ve had to make difficult decisions to keep our business profitable (especially over the last year), which unfortunately widens the gap further. But context is crucial. These changes weren’t made through preference, but necessity. Over the last few years, Financial Advisers have seen giant hikes in Professional Indemnity Insurance Premiums and Regulatory costs. Some firms have seen a 140% increase in these costs in the last 3 years. So to remain profitable and continue to meet our costs and pay our staff’s wages, we’ve had to increase our fees and the minimum investment we can take on.
We aren’t deliberately depriving individuals with lower incomes because we don’t want to help them. But the painful reality is that as a business’s expenses rise, so must their fees. It’s not political, it’s not ‘immoral’, it’s just simple economics. If we could advise everyone who needs advice without having to cut our employees’ salaries, we would. But unfortunately we’re the middle men. The changes come from the powers that be. The Regulators and Insurers.
So, whether you’re an existing client of ours, someone considering advice or just an interested observer – try to take this criticism with a pinch of salt. Financial planners aren’t greedy or unjust. They just need to be paid for the work they do. Just like any other business.