28th March 2011
I can understand why someone would want to service their 1974 pride and joy MGB GT and I can almost comprehend domestic DIY (well almost) but personally I would draw the line at do-it-yourself dentistry.
But why do some folks attempt their own financial planning?
Let me speculate I understand the wannabe-a-Buffet mentality, gleaning information from the Sunday papers and trade journals, forming investment clubs and having a go at beating the markets.
I also get the rate-tart brigades, who move their cash and ISAs to chase the best fix.
But when it comes to the real nitty-gritty of financial planning, which involves acknowledging that your investment strategy is not working or confessing that you are spending when you really should be saving, how many can take that long hard look in the mirror and admit to being wrong?
I am fortunate to number amongst my clients some of the top fund managers in the UK and they would confess (without too much arm twisting) that they know how to invest in their own specialist area but, when it comes to the crunch, they need someone else to hold the mirror to their faces.
The truth is that they would definitely agree neither to having the time nor the inclination for such matters and they would rather employ a professional to do it for them.
Money is an emotive subject and there will always be an element of pride involved when asking someone else to review your decision-making processes.
However, I would postulate that the very best advisers are at ease in dealing with what is potentially an awkward situation as doctor is not embarrassed to see a person in the all-together.
From my experience, the basis of a good relationship between a client and an adviser is to establish the method of remuneration at the outset and, to me, the only way to achieve this is to agree a fee for the service.
I charge my clients a fee which is based on either the time that will be required to manage their affairs or the value that can be added to their net worth or, more commonly, a combination of the two.
That way, my duty of care is clearly defined and there is never a doubt that I am acting in the client's best interest. Moreover, if I cannot add value or save time, I would not offer to provide a service.
So, before you develop financial cavities, consider some professional financial planning; surely it would be less painful than pulling your own teeth?
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