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The value of advice

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One of the greatest mistakes the general public makes about financial advice is the belief that financial planners are hired to pick the market right to ensure their clients make lots of money.

What an adviser does is something I think about everyday, as I own a financial planning business, but I thought I needed to put pen to paper, or fingers to the laptop, because of something adventurous we’re doing on my Sky News Business Channel program SWITZER.

Money makeover

In coming weeks we’re taking three households on a 12-month journey where we do – in the words of the modern media – a ‘money makeover’.

It’s nice sounding for the media but it’s really too superficial for what financial advice should really mean. I would prefer to call it something like ‘money coaching to affect real change in people’.

It’s not as catchy, but generally anything of real substance seldom is easily sellable to mainstream media.

That’s why you seldom see academic economists on current affairs programs as they don’t cut to the chase and they want to think out loud and even not come up with a conclusion. That’s bad TV!

The coach

What the best advisers should do is form a relationship with their client and work out what kind of money leadership is necessary to make the monetary relationship achieve the best results.

The adviser shouldn’t be a product flogger but, as I have already suggested, they have to become the coach and the kind of coaching will differ according to the level the client is at.

Tony Roche, the great Aussie ex-tennis player and former coach of Roger Federer, could coach the best and the worst, the oldest and the youngest, and he would adapt his ‘consultancy’ services to suit who is on the other side of the net.

Great financial advisers should be just the same as great personal trainers, food coaches, business coaches, teachers and even parents – they have to adopt a leadership role.

Importance of leadership

Last week, I spent the time listening to one of the world’s greatest leadership speakers and authors – American, John C. Maxwell. He was in Australia talking about how you can raise your leadership from the lowest level where you are the manager and people follow you because they have to.

In aspiring to get to his top or fifth-level of leadership, you have to build relationships and eventually they will follow you because you care about them and because you have developed them. You haven’t only grown in stature as a leader, but so have they because they chose to follow you.

Change is good

He argues leadership is influence – plain and simple – and that will be the goal of this Sky News Business Channel program we’re calling New Financial You.

This was a catchy name based on the idea that we will offer this to three families/individuals to line up with the new financial year but unknowingly my media colleagues have really hit on the main point of a normal person going to a financial adviser – they have to want change! They want to be a new money person, where they swap money chaos, neglect or disinterest for order, attentiveness and lots of interest.

That’s when the financial adviser experience is really worth it – when the client becomes money savvy, focused on their goals and continuing to be engaged with the process that will make those dreams become reality instead of a ‘Groundhog Day’ money nightmare.

We have selected the three lucky families and individuals and we will be harnessing the brains of some of my people and some of the hotshot experts who appear on the business channel.

The ‘clients’ for the program will be monitored over the year and the goal isn’t necessarily to increase their wealth in the first year, though that would be our intention, but more importantly it will be to affect permanent change in their attitudes to spending, saving and investing.

Learn leadership

That’s the leadership task of any adviser and so if the stock market should put in a 12-month shocker, which I don’t expect but it still could happen in these financially vulnerable times, what will shine through will be the strategy for wealth accumulation.

John Maxwell insists that you don’t learn leadership in a day but daily, and I think the same applies to money. History is often criticised as a guide when it comes to selecting an investment or super fund, because the past doesn’t have to be a reliable guide for the future. However, in the absence of anything else more reliable, past performance of certain fund managers, companies and assets is better than nothing as a starting point for an investment strategy.

Money tips

The key to building wealth is to identify your goals and then you have to draw up a strategy to make it happen. The strategy in a nutshell is to spend less and/or earn more, save more and then invest in assets that have a good history of delivering.

All of this can be helped by knowing the rules for certain investment products, for example using a self-managed super fund, incorporating the tax implications, to create your wealth building plan.

By doing this you should end up with more wealth in the future than you would have by ‘relying on’ the chaotic, neglectful and the “it’s all too hard” attitude of most Aussies when it comes to getting richer.

Maxwell argues you can’t lead others until you learn to lead yourself and so if you want to be a great role model to your children or your partner, you have to step up and embrace change before it’s too late!

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Wednesday, July 06, 2011

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