One of the feelings you may get when working with us on your retirement planning is a slight feeling of discomfort – not much of a sales pitch, I hear you say!
But it’s true… we believe that it’s an important side effect of us doing our job properly. It’s really not that unusual, it happens in many aspects of our lives. Let us explain one such example.
Imagine you go to your doctor and he says that you have high cholesterol and you are overweight, what would you expect your doctor to say? You would probably expect them to advise you to eat more healthily and to exercise more; they may also refer you to a dietician for practical advice on how to better manage what you eat. Now, this might not be what you particularly want to hear or do, and it certainly means making an effort and changing your established behaviour, but it is certainly what you should expect your doctor to advise you to do.
Your doctor isn’t there to tell you that; “it’s ok not to eat healthily and not exercise” and you don’t expect them to. They are highly qualified professionals and you should expect them to make a comprehensive diagnosis of your health and to prescribe the most clinically effective solutions to deal with any problems they identify, based on the evidence before them – it’s called evidence-based medicine.
Now bring that same ethos into the world of financial planning. Many clients will present themselves to an adviser and many, if not most, will stress the importance of keeping their capital safe. We know that this is true because 40% of all insured Approved Retirement Funds in Ireland are just invested in cash deposits.
Now, unlike meeting with a doctor, some advisers are happy to give you what you say you want, rather than having a much more difficult conversation with you about what you really should do. This is not to say that the products on sale in Ireland today are unsuitable. In fact, all advisers are required to provide advice ensuring that the products they recommend are suitable. But this suitability standard is a lower duty of care than that provided by your doctor – advisers do not always have to act in your best interests – as a Fiduciary.
We are all familiar with the Hippocratic Oath sworn by doctors which ensures that your doctor will always seek to do what is in your best interest and to act as your fiduciary or trusted adviser. However, Financial Advisers in Ireland are not required to act as your Fiduciary – to step into your shoes and to always do what is best for you.
Consequently, quite often the products recommended in Ireland today are focused on capital preservation simply because that is what retirees are mostly asking for, irrespective of whether that is the best route to determining and achieving your objectives. The adviser gives you what you asked for.
By contrast, we believe that retirement is one of the “big rocks” in your life, like getting married or having children. These are life changing events that require an objective and professional assessment of what is in your best interests. The decisions are too important to be susceptible to simply giving you what you asked for, whether it’s the right course of action or not.
We also believe that the focus for many people should not be on the products used to provide for retirement, such as making a decision between annuities or Approved Retirement Funds. But rather, your focus should be on the things that matter to you, like how much income you need and the things that are within your control like how much risk you take.
All of these take diligent and specialist probing and attention. That is what we do.
Make sure your adviser guides you, not the other way around. At Global Wealth, we help people every day to identify and achieve their retirement goals. Even when it takes them outside of their comfort zones.
Would you like to find out more about how Global Wealth works with these people?