Value for money

The Wokingham Paper - - NEWS - Andy Pul­ford, Direc­tor and In­de­pen­dent Fi­nan­cial Ad­viser at Faron Part­ner­ship Ltd

THERE’S no dis­put­ing that fi­nan­cial ad­vice pro­vides tan­gi­ble ben­e­fits, not least the ex­tra value it adds to your in­vest­ment by en­abling you to make the right de­ci­sions at the right time and more im­por­tantly stop­ping you from mak­ing bad ones.

This is known as Ad­viser Al­pha, or to put it an­other way, de­liv­er­ing more for you than you can de­liver for your­self.

But that’s not to say that once your ad­viser has set you on the right path he or she should sim­ply wave goodbye and dis­ap­pear off into the ether.

If you’ve bought fi­nan­cial ser­vice ad­vice in the past and con­tinue to pay on­go­ing ser­vice charges you should re­ceive some­thing more for your money.

But un­for­tu­nately, many peo­ple who’ve had in­vest­ments ar­ranged for them go on to have lit­tle or no in­ter­ac­tion with their ad­viser other than maybe a let­ter once a year.

The client also has some re­spon­si­bil­ity here.

By fail­ing to take up the of­fer of ad­vice they are po­ten­tially miss­ing out on the Al­pha.

Given that on­go­ing ad­vice fees are typ­i­cally charged as a per­cent­age of the value of your in­vest­ments an­nu­ally, start­ing at a low point of 0.5% ris­ing to 1% at some prac­tises, this can make a size­able dent in the value of your in­vest­ment.

It fol­lows that you should get some­thing tan­gi­ble of value for it.

How­ever, if you find your­self in a sit­u­a­tion where you are re­ceiv­ing lit­tle or no com­mu­ni­ca­tion from your fi­nan­cial ad­viser each year you should chal­lenge them over it or look for some­one who is going to de­liver a more in­volved ser­vice for you.

At Faron Part­ner­ship Ltd we would pro­vide an an­nual re­view meet­ing as the bare min­i­mum plus we’re on-hand all year round to as­sist with any is­sues or ques­tions you may have.

This re­view meet­ing in­cludes a fi­nan­cial fore­cast so you can put your money into con­text and see how it meets your in­come and cap­i­tal needs for the fu­ture.

This guides us as to how your money should be in­vested to achieve your ob­jec­tives which are likely to shift as you move through life.

If all you’re get­ting is an an­nual state­ment once a year ask­ing if you want a catch-up meet­ing then it’s clear you’re not get­ting good value for money.

Some­times what hap­pens is that ad­vis­ers have ac­cu­mu­lated a lot of clients over the years which they are un­able to look after ad­e­quately – they sim­ply don’t have the man­power.

Re­mem­ber, if you’re pay­ing a fee for on­go­ing ad­vice, that’s what you should be get­ting, es­pe­cially as most peo­ple’s needs shift from year-to-year mean­ing their fi­nan­cial di­rec­tion may need to be ad­justed as well.

Re­mem­ber, the value of your in­vest­ments can go down as well as up. Past per­for­mance is not a re­li­able in­di­ca­tor of fu­ture out­comes.

Pen­cilling in an an­nual re­view meet­ing is the least we can do to help you man­age your fi­nances – we’re also on hand all year round to as­sist with any queries or ques­tions you may have

With Faron Part­ner­ship’s ANDY PUL­FORD

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