‘It’s about impact’: Why advice must go beyond investment returns

It is easy to assume that with every client, their goal will solely be finding ways to maximise their money,and Rasiah Private Wealth founder and principal adviser Thabojan Rasiah said this can certainly be in line with what clients want.

“If your goal for a client outcome is ‘we're making you the most money’, then the focus on investment solely makes a lot of sense. You can see why some advisers would go that route and why some clients would prefer that route,” Rasiah said on The ifa Show.

However, he explained that for many clients, seeking advice is deeply tied to personal goals in their lives.

“On the other side, not every client will be focused [exclusively on returns]. They're going to have particular individual goals and individual circumstances that would change. So that is where you kind of start breaking it down in that client outcome space,” he added.

For Rasiah, helping clients understand why they are seeking an adviser and what their goals are is fundamental to process, as the guidance they give can have a tangible impact on their lives.

“You want to be clear about why you're [seeking advice]. What is the purpose? And when we thought about what we do in our firm, it was really important to us that it was about impact,” Rasiah stated.

“If we can have an impact in people's lives, why wouldn't we, rather than choosing to not?”

Rasiah explained further that understanding aclient and their goals, advisers are able set goals for their clients based on what they want to achieve through financial advice. Rasiah explained that this may be something tangible, such as wanting to retire at 65 with $100,000 a year.

However, asking questions about what retirement may look like can inform the goal setting process even more. More intangible things, such as a client’s desire to spend more time with their kids, not be a burden to the family or even having time for activities such as volunteering can become tools to help inform the advising process, and where best to direct their investments.

“We do have people saying, ‘I want to retire as soon as I can’, and that's fine. But what does that mean? What does that look like?,” Rasiah said.

“Often they say, ‘oh no, I'm not going to do nothing. I'm not going to not work … the real answer is having more control in my life, having the option to be doing something I enjoy. So, if someone's stuck in a job that they hate, then they say, ‘I want to retire’. But no, they want to be doing something of purpose that is more meaningful to them.”

For Rasiah, using these client desires to inform their goals can also create better long-term targets than simpler, wealth generating goals.

“[A lot of people] get to their goal and then say ‘but I’m still not feeling like I’m doing things that I wanted to do. I thought I wanted 10 properties. Now that I've got there, what do I do?’,” he said, adding that if a client says they want to spend time with those they care about, he can track these goals long term.

To hear more from Thabojan Rasiah, tune in here.