Shelley McCarthy: Some customers just want validation

Artwork by Dan Murrell

I recently met a client who, since our last meeting, had been diagnosed with breast cancer. Although she was also given the “all clear”, it had caused her to re-evaluate certain aspects of her life.

She lived in a building with a lot of stairs, in the city and where there was no possibility of installing an elevator or a chairlift.

She planned to give money to her son to allow him to build a hut at the bottom of her garden. Not only would this help him add value to his property, but it would give him a place to stay, and perhaps for his recovery in the future.

She was thrilled that I was able to see the big picture, rather than just focusing on finances

It would give access to the sea air and the countryside; allow him to spend time with his grandchildren. The non-financial benefits were enormous, both for his lifestyle and for his well-being.

My client had been slightly hesitant to continue, however, although she couldn’t articulate any real reasons why not. She had enough guaranteed income to cover her expenses and had always planned to give other gifts to her children.

Portfolio value

I think part of his concern was that the value of his investment portfolio was down from the same time last year. However, sometimes tax and finances are not the most important part of a decision.

This action would give him so much more.

Sometimes it’s about having someone who understands money to discuss things with

Yes, the value of the portfolio was down and there were taxes to pay, but the value could still go down or, conversely, the tax bill could go up.

The annualized growth of the portfolio since its inception has remained very positive. She was not dependent on the money and it would put it to very good use – for her and her son.

After we met, she messaged me to say how helpful it was to discuss it with me and how she was so happy that I got to see the full picture, rather than focusing only on finances. Construction was now underway!

We must be aware of the influence we can have on people’s lives and use it in the most positive way possible.

This is just one example of the true value of financial advice. It’s the kind of experience that, like this lady’s plans, is hard to quantify. Counselors talk about this stuff, but it’s true, day in and day out. Some customers just want validation.

Here is a second example. I recently spoke with another client, who wanted to discuss pension contributions as part of keeping his income below £100,000 to minimize his tax liability, and also to ensure he was eligible for 30 hours of free childcare.

He understood the principles but, again, wanted to talk about them. He didn’t need me to implement anything or make changes to his portfolio, but being able to call and talk about issues like this was part of our ongoing proposition which he appreciated.

Sometimes this validation involves the use of a cash flow forecast.

The non-financial benefits for the client were enormous, both for her lifestyle and her well-being.

For example, one of my clients wanted to know if she could afford to match her ex-husband’s gift to her children so that they could buy property.

With the use of a cash flow forecast, we were able to illustrate that she had more than enough to be able to do this (and in fact, she could also retire immediately, which was another wish!)

positive influence

Financial planning and advice goes far beyond finance.

Sometimes it’s about validating ideas. Sometimes it’s about having someone who understands money to talk to.

We need to be aware of the influence we can have on people’s lives and use it in the most positive way possible.

Sometimes tax and finance aren’t the most important part of a decision

I know the new Consumer Duties legislation is supposed to help with this – but none of the advice events above have led to a new product or further investment.

In fact, in two cases, withdrawals are made from wallets, which means that we are dealing with less money.

Will the new influx of private equity-backed consolidators mean that this kind of advice is harder to come by?

Shelley McCarthy is Managing Director of Informed Choice Ltd


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