Strategy first, products second: planners urged to keep it simple


There has been a trend of financial planners leaning towards being investment advisers rather than strategists, according to Philippa Sheehan, Managing Director of adviser group My Adviser.

This message came in a presentation to the Gold Coast Chapter of the Financial Planning Association (FPA) which Ms Sheehan was addressing on the topic of ‘Who is making financial advice complicated?’ The presentation addressed the fact that the advice process appears to have become excessively complicated in recent years, with planners feeling that they had to meet a raft of different requirements including from ASIC, new regulations, the media and even the demands of different software types and their own licensees.

“I understand how difficult it can be to keep up with changing obligations while drowning out unnecessary noise, and believe me I know how loud it has become in recent years. However, we simply can’t afford to lose sight of why we’re here – and that is to provide our clients with holistic solutions to meet their very specific needs.”

“Licensees, now more than ever, should be supporting their planners, mentoring them and providing them with the tools to allow them to be strategists. This has been a key focus for My Adviser for the last twelve months and we are committed to continuing to provide this form of support for planners,” she said.

To that end, she counselled planners to pare back excessively complex financial plans, suggesting a five-step process that ensures the clients’ needs are kept at the forefront at all times. The five steps involve looking at: 1) goals & objectives, 2) a client’s personal situation, 3) strategy 4) product, and 5) cost.

Ms Sheehan went on to state that a holistic approach generally required more than what one product or service can offer. Accordingly, advisers should choose products for their clients with great care – and only when they meet the clients’ strategy rather than the other way around.

“Product sales people are in the business of selling products, not providing financial advice. Remember, you are the one who has to explain the situation when times get tough, not them,” she said.

Ms Sheehan also pointed out that, for many clients, their needs are relatively simple and do not call for over-engineered solutions that may put them at unacceptable risk.

“We are at a tipping point and there is a lot of confusion in the market but we have made great gains on the whole and we need to forge ahead with those and not let the current environment divert us from our course,” Ms Sheehan said.

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