Why financial advisers who tell the truth about money make the world a better place
A force for good if the truth about money is told
On leaving the military, I joined the international financial advice industry and for several years I followed what I was told was standard – I didn’t know any better! I did my job as best as I could and believed nearly all I was told by those in the industry. However, over time some fundamental truths permeated my consciousness and I began to see things differently. I now look at the same products and services but the wisdom gained from experience has removed the blinkers that the industry donned me with.
The professional (not industrial) financial adviser of the future is a warrior for good. He has been through this conveyor belt of change. He now understands that his role is not to promulgate the misinformation of the past but to represent his clients’ best interests and also to share his insights as far and wide as possible, in the hope that other market participants (advisers and clients alike) can benefit.
The future is not about going with the current, but against it. It is about challenging the status quo to create ‘positive change’ for our clients and therefore ourselves. Indeed, the future is about pursuing a strategy which is the polar opposite of others, not about replicating the broken models of the past. It is about financial advice as a force for good in people’s lives, not about a mechanism for shareholder return.
A couple of quick dictionary definitions:
Industry: Economic activity concerned with the manufacture and distribution (selling) of goods.
Profession: A paid occupation, especially one that involves prolonged training, formal qualifications and the delivery of skilled advice.
The difference is obvious!
The financial services industry, comprising banks, insurance companies, investment houses and brokers, have repeatedly messed up (mis-selling scandals) by manufacturing and selling us mostly unnecessary, often very opaque and hugely expensive financial products that the vast majority of people do not need or want. This is because the industry exists to make the biggest returns possible for its shareholders. It uses its big advertising budgets to indoctrinate its victims with full page adverts, phone calls, annoying internet browser pop ups, banner ads, and 'sponsored' emails. The industry wants advisers and clients to ‘buy’ its medicine from the financial pharmacy.
In stark contrast, at AES International, we evangelise the idea that as financial professionals we are to use our knowledge to tell our clients what they really need to know about the often complex world of finance. This starts with a diagnosis first! We aim to make the world a better place by simply telling the truth about money and representing our clients’ best interests. A consequence of doing the best things possible for our clients is that our own success follows, as demonstrated by our many financial services awards and rapid growth.
We don’t need more funds, we don’t need special allocation rates, we don’t need what looks like free (but is actually outrageously expensive) advice. Our clients simply want to know the truth that can be summarised as follows.
The financial aspects of any person's life can be translated in numbers. In broad terms, people's lives are similar in this respect and often follow similar patterns and contain similar problems. In specific terms, though, no two people's lives are the same and the numbers, vary vastly through specific circumstances. Charting these figures and applying assumptions to them is the first part of understanding what the future may hold for our clients. This is called lifetime cash flow forecasting, which has already been the subject of an early piece here on the AES International Financial Advice blog.
A true independent professional financial adviser can translate this complex spreadsheet into a few simple–to-understand life scenarios, and use his skill to diagnose the past, estimate the future and structure your financial life to help you get to where you actually want to go. The result is a trusting, open and transparent relationship with your adviser based upon clear knowledge.
Our view at AES International is that no one knows as much about your finances as you do. As such, you need to be the Chief Executive of your own financial destiny, and an independent financial adviser should act as your Chief Financial Officer (CFO). Your CFO uses his professional knowledge to help, inform, advise and guide you to develop your own financial road map based on your specific situation. This encompasses many aspects such as your life goals, your attitude to risk and previous experiences of investing. Using the CFO’s skills in taxation, budgeting, investment skills, forecasting, the types of solutions available and the costs, a holistic financial plan can be brought together through both of you working together for the common good of both of you.
The trouble with international financial 'advisers' is that they are very rarely advisers in any professional sense; rather, they are generally sales people with few ( if any) qualifications. They are little more than glorified personal shoppers, flitting here and there to find off-the-shelf financial products to sell to you, with no real thought given as to whether it truly has any benefit for you. In some cases the product may be exactly what you want (as luck would have it), but in other cases you may want to benefit from an adviser’s trade discounts or have a detailed financial plan created with coherent objectives and cash flow planning. The key is to make sure that both the expertise and service you expect is actually delivered and right for you.
Always clarify anything that you don’t understand, make a note of all other things you would like to know and don’t hesitate to ask others. If the adviser isn’t forthcoming, alarm bells should ring.
The financial services industry is like the Amazon River, very big with a strong current. To go against this is brutally hard work in my experience. However, we are hugely passionate about telling the truth about money and providing financial advice and services that we ourselves would happily take. We believe there is a better way than the current status quo in the international financial advice marketplace.
Chief Executive Officer