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Oi, you lot. Stop biting each other's heads off here.
You're all arguing the same thing. What's missing here is the context around what AMP are doing in their most recent campaign which they are marketing as 'ground breaking' which to us is nothing more than fiiiiiiiiiiiiiiiiiiiiiiiiiiinnnnnnnnnnnnnnally catching up and realising that setting goals are part of the process.
AMP are making the financial planning industry look bad by being so late to the party, but geez guys and gals, ease up on each other. You're clearly all putting the client first, not product - this includes the author.
In the words of Finnick Odair in The Hunger Games "Katniss, remember who the real enemy is...".
Yes good point. Fergus. Goals, Objectives, Priorities, 'stuff i need to do'. However you frame it is all the same. The author's view I think is based on this current trend that we can put $ figures, time frames, and tangible outcomes on all of these goals which is of course not true. I want to go travelling, when, where, how much? I don't know, but I want to be able to go where I want when I want. Too often the goals based approach is "I want to go to Europe in 3 years time and it will cost me $30,000", that's not how people think, in this example the goal is to have the financial freedom to be able to go next year, in 3 years or in 5 years and spend $10k or $50k.
Really Andrew? Is that what you read into this article? We go way beyond taking their goals into account, that's the point I was trying to make. Values based is as deep as you can get to know a client, we use psychological techniques to assist us. Best Interest duty, my goodness the values based process certainly has that covered. Happy to expand but you've read this all wrong.
Put the two together and I think you are onto something.
Sorry Mark, but I think you are missing the point here. Yes, clients change their goals continuously but that is where the ongoing support of a good financial planner comes into play to monitor these and make the necessary changes. Products do come into this when safeguarding their income to ensure they achieve their goals regardless of what happens to them in the future as well as good investment products to suit their needs and goals.
If you don't take into account their goals and what they want you are simply flogging a product off that will not necessarily benefit the client, and in turn, doesn't meat the best interest duty.
I still find Mark that most planners don't know the difference between a Goal, a strategy, an objective or a purpose or values. A great person once said “with a purpose in place, decision making becomes easier. You can look at an opportunity or a challenge and ask yourself, “Is this the right thing to do given our purpose?” It's when you link the goals and the purpose you get great outcomes for the client.
In 1962 Decca records rejected the Beatles because they said "guitar bands are on the way out". People have been calling, and misjudging, "fads" for centuries.
So based on this theory, I assume Mark doesn't set business goals and doesn't work towards anything professionally or personally?
Hi Steve, wow that little article has stirred a few people up! Thank you for pointing out the anonymity element btw. Your example re buying a home is an excellent one to think about from a values-based perspective. Firstly are your clients buying a property for the right reasons? Or are they responding to socially imposed value sets? Or is family putting pressure on them to get into the property market. By working with the clients to help them understand and consider their values you can at least help them be sure they have framed the decision to buy a home/property in a healthy manner. Moving on from there, how much should they spend? Again understanding their values will really help here, otherwise they are likely to borrow the maximum amount they can and then go and buy the least worst house available for the money. This is where things can start to break down, people over-stretch themselves and other areas of their life suffer which leads to reduced levels of well-being. Once these excellent conversations have occurred you can pick up exactly where your firm does and do a great job of helping the clients act on the objectives they have set. Hope that makes sense.
Goals based advice is something that great advisers have been doing for 30 plus years. That's actually why we're called Financial "Planners". I disagree with Mark's comments about goals based advice but can see where he is coming from. I think what he is saying is that Robo Advisers, the institutions (AMP/ Hillross) have now jumped on board and are using it as the latest sales tool to flog even more product. A similar process as to how once upon a time institutions used technical solutions to RBL problems and 8 different tax components as a solution to flogging more product. The problem with just jumping on board like AMP has done is that unless you understand the ''purpose'' behind the goal it's going to end in tears. I call it the yo-yo diet effect. A bit like having a poor personal trainer. You've got a goal to lose 10 kilograms but you're continually in hitting and miss ultimately failing . What's missing with Goals Based Advice promoted by Robo Advice and AMP, the Institutions, is the relationship required, obtained by an understanding of the clients '"purpose" and values to truly inspire clients to achieve their goals. Good advisers have been doing this for many years.
yep, the real aim is Union Super Funds controlling the superannuation space. Funny how they've run ads on telly with a fox when it's really the unions and the Labor party that are the foxes in the hen house. Would you really trust your super to a union rep from the CFMEU or the Health Services Union???
Ha. Totally true and the next evolution will be towards wellbeing focused life advice. Advice won't be just about helping people get that next holiday or buy a new Audi, it will be how to help them lead more fulfilling lives and that does not just mean financial goals. Love it Mark
Yes, client goals do change over time. This is a given. This is why it is important to re-engage regularly with your client to capture these changes and project manage the strategy accordingly. Understanding a clients values and beliefs is also important as it helps the adviser prioritise the clients goals. I don't see how you can dismiss goals based advise and still act in the clients best interest.
Mr Nagle, why else to clients come and see a Financial Planner other than to assist them to achieve their goals. Goals Based is not a FAD, it is instead what we as advisers should always be doing for our clients, ie. increase the certainty of achieving client goals. This could include life and disability insurance to ensure that their child goes to the preferred school regardless if the client is alive or not or in good health or not. It could also mean helping the client to live a comfortable life and holiday when they want regardless if a GFC type event occurs again by recommending a more suitable portfolio mix, it could be advice on their estate plan to increase the potential for their estate to be better protected and more tax effective and so on.
Interestingly...Mr Nagle's firm's investment philosophy (we we concur with) is:
"We believe that any investment strategy should be designed around our clients objectives and values".
Goals are objectives...it is what we want to achieve for ourselves and our clients.
In your caravan example, yes a client may change their mind, but better to have the cash for the caravan and use it somewhere else than not to. Your simplistic caravan example, is only (a small) part of the broader goals based advice process, again financial advice is about providing advice, outlining courses of action and helping clients to implement - to increase the certainty that their goals will be more likely achieved.
Oops touched a nerve
I think you are being a little harsh.
At its heart all advice must be goal based so gba is nothing new. However I have yet to meet a client who actually has s financial goal. They all have lifestyle goals which drive a need for a financial solution. Teasing out the underlying values to help align these with the goals is the key to best advice.
Some common sense at last! Not only are people inaccurate in specifying their goals, many are also quite vague. A lot of people say their goal is to "be more comfortable" or "do more with their money" or "to have more choices when I'm older". They cannot narrow that down to a specific amount and specific timeframe. They shouldn't be pushed into inaccurate specificity, for the sake of some corporate bureaucrat's "goals based process". Particularly if that process really exists to provide a smokescreen for inhouse product flogging.
Hey "Stupid Article" put your name to your comments next time..... for what it is worth I agree with your view. Mark I would be interested to see how your Values based advice works in reality... We provide Goals Based advice by working backwards from a specific goal.... e.g We want to buy a home worth X and pay it off in Y years.... How would you do that in a Values model?
ISA hate LRBA's and you are spot on with your comment John M.
Labor and it's grubby Unions hate loosing money to SMSF's with or without a LRBA.
And if ISA actually provided an administration service that could be used by professional advisers then we may use their funds. However, as they are so anti adviser's they simply won't provide an efficient service that works for the adviser to use for clients.
And using the heated housing market as the excuse to ban LRBA's is just selective commentry that covers the real Union grubby agenda.
Why is IFA giving this guy a platform to rant?
Mr Nagle you're stating the obvious. Nobody can predict the future. But to dismiss goals-based advice as a 'Fad' on this basis is wrong IMO.
Helping clients set smart and realistic goals and providing advice that improve the likelihood of achieving these goals is how good financial planners have been doing it since before FOFA / FSR. So to say it's a fad is just stupid. Are you saying that best interest and appropriate advice is a fad too?