Mind the disciplines through Christmas – and Happy New Year!

In a few months it marks 20 years since Sally and I opened the doors for business from the 5^th floor of Investment House, Featherston St Wellington.  We are older and wiser now and looking forward to transitioning into lesser roles within the company, however it is with pride that we have maintained our brand promise over the last two decades. Providing a holistic approach to financial planning through – Health, Wealth, Relationships, and Habits. Code compliance of the Financial Markets Authority now demands authorised financial advisors place the interests of their clients ahead of themselves and the Commission for Financial Capability travel the country attempting to educate people about saving and investing. We’ve been doing both those things for the past 20 years. These are well meaning highly paid bureaucrats.

Being an impartial, self-employed financial advisor does not come with a state servant salary. Clients are not compelled to take our advice and nor are they coerced to remain as fee paying customers. The role of a financial advisor whether a bank representative or an independent – is a voluntary relationship for a mutual benefit. Both parties need to benefit from the relationship – it is a non-sacrificed relationship. However unlike the well-meaning bureaucrat’s salary, unless the independent advisor provides ongoing value, their income ceases when and if clients choose alternatives.

In my opinion there is no fine line. We (at Foxplan) have a moral obligation to provide our clients with perspective. Why it’s important to insure. Why it’s important to budget and repay debt.  Why it’s important to understand investment principles and how to grow wealth. Why it’s important to maintain health and how aligned habits with money and habits of health really are. Why it’s important to operate on the same page as ones partner – at work or at home. Why daily decisions and daily disciplines are the fundamentals for achieving good habits with money, people and health.

We could play the client first game. Compliance provides the ideal smokescreen. Attitude to risk profiles, disclosure, scope of service agreements, written statements of advice. We could sell lots of product that way. Transactional organisations do just that and product providers the same. We prefer to take responsibility for telling our clients the way it really is.  It’s called giving ‘advice’

• They need to repay debt – whether mortgage or loans or consumer
• They need to get control of their budget – at source (in the bank).
• They need to mitigate risk – by insuring assets and income.
• They need to take risk to grow wealth – via asset allocation or business
• They need to consider multiple generations – and manage their estate – Wills, Trusts, Enduring powers of attorney, Business agreements, and Property relationships.
• They need to differentiate between volatility and loss – and maintain diversified assets.
• They need to focus on maintaining purchasing power not maintaining capital – when in retirement
• They need to consider implications of tax on a double income family
• They need purpose in life and goals to motivate.

They need to understand that nutrition is an inexact science just as finance is. It’s notoriously difficult to prove or disprove dietary claims just as it’s difficult to template a budget which fits all. Accurate research requires individuals to be meticulous in recording every morsel of food that passes their lips and to do so over a long period of time, ideally under supervised conditions. Understanding your income and expenditure, net worth and retirement plan – is just the same.

Adverse health outcomes like heart attacks and strokes don’t happen overnight. Positive financial outcomes don’t happen by chance (in the main). Each of us is different and we all metabolise our food, use our money and develop our relationships in a unique way. We all know we need to exercise, refrain from smoking and monitor our intake of alcohol and our blood sugar levels – balance the budget and aim for surplus, invest wisely and insure responsibly – treat people the way we like to be treated, have the courage to tell people what we think but balance our assertions with consideration for the other persons perspective. We know if we don’t do these things our health risks will increase, our financial position will suffer and maintaining well-meaning relationships will be a challenge at work and at home. Trendy diets, fad financial products and Agony Aunts don’t provide long term solutions.

It’s what we as individuals do every day, over a long period of time that makes the difference. After 20 years Foxplan has detailed and positive results but more particularly those of our clients point to the importance of measure, direction, relationships and advice – with patience.  The ongoing voluntary relationship for mutual benefit – not regulatory coercion.

As Dr John Mayhew Chief medical officer for Sovereign, former Dr to the All Blacks and medical advisor to Jonah Lomu says – “the human body is uniquely adapted to metabolise what we put into it. My advice is to eat well, exercise and be wary of trendy fad diets or personal belief systems presented as science.”

I couldn’t agree more – the same online, robo information, product pushing fads invade the insurance and investment markets – be careful out there this Christmas. It is the time for really enjoying life with the kids and families and relationships – eating, drinking, spending, spoiling, caring and debating. 

Have a good time – Kind Wish and Happy New Year for 2016 and beyond