Ongoing Advice – Have You Reached Your Destination?

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Ongoing Advice – Have You Reached Your Destination?

“FCA questions 20 biggest firms about ongoing advice services” – that’s a headline that’s certainly sparked some fascinating conversations. The industry is starting to look back, reviewing what has, or hasn’t in some cases, been provided in the past and debate what the future should look like.

The Simplicity of Service Plans

Meanwhile, I’ve just taken my car for its annual service. When I bought the car, I also purchased a service plan. It provides me with peace of mind. I get a reminder that the service is due, I book an appointment and the garage takes care of the rest. I accept service plans aren’t everyone’s cup of tea. I might have been able to save money by declining it and shopping around for a decent mechanic. I definitely couldn’t have tinkered with the engine myself. When it comes to cars, I’m not an expert and I’d rather be doing other things.

The service plan is a simple concept really. I am a consumer with a need, the garage can meet that need, they charge me for their service and the final, and most important part from my perspective, they must deliver the service or I will stop paying! I have a similar arrangement for my gas boiler.

Defining Ongoing Advice

If we accept the simple concept that, if you charge for something, you must deliver it, what should ongoing service or advice encompass? We could consider an overly wordy definition like “ongoing advice provides a mechanism for individuals to adapt their financial strategies in response to changing circumstances, ensuring they remain resilient in the face of uncertainty.” Instead, let’s get back to my car.

The Unpredictability of Journeys

Now that it’s been serviced, I can set the sat nav and drive from A to B. Again that sounds quite simple but what if my needs change? What if I’m heading to the cruise terminal and my husband realises he’s forgotten his formal shoes so we need to head to a shopping outlet enroute or our (his) gamble on “road closed ahead” hasn’t paid off and the road is indeed closed before our left turn? Umm, purely fictitious examples of course!

Ongoing advice might be as straight-forward as stay in lane or change lanes but carry on in the same direction (adjust the underlying investments but keep the wrapper). On the other hand, it could identify a complete re-route is required.

Case Study: The Value of Ongoing Advice

Take the client who’s been diligently using their ISA and pension allowances for several years. Would some cash flow forecasting show that they are now unlikely to need to rely on future investment growth? Have the investments grown well enough that the client now has an Inheritance Tax liability? This is a scenario that I discussed with an adviser recently. Her ongoing advice was to propose a strategy that protected future investment growth from Inheritance Tax whilst also addressing the existing liability. Had it not been for her advice over the initial years, accessing the capital tax efficiently to implement the proposal might have been more tricky.

Starting with Ongoing Advice

Not long ago I was asked where one should start with ongoing advice. I concluded that perhaps the easiest approach was to treat all clients as if they were new clients. Go right back to basics and analyse what the client has in place and whether it addresses all of their current objectives. There may be some advisers that protest they don’t have the time for that. What would I do if my garage reneged on the full service and tried to palm me off with a quick car wash because they were too busy with their new customers? I’ve partially answered that one earlier. Of course, I’d still like a service plan so I’d look elsewhere.

Addressing Time Versus Demand in Financial Advice

Not having the time isn’t an excuse for not providing what a client is paying for. When faced with the time versus demand conundrum, what are the options? Again, I think that’s quite simple. Don’t charge and don’t deliver – only really an option if you’re looking to scale down your advice business – or continue charging and find a way of delivering. That way of delivering might involve streamlining some of your processes and/or outsourcing some of the technical work.

If you’d like to discuss either of those approaches, we’d love to talk with you, book in a consultation meeting with us here.

Next Up: Check out our blog on Ongoing Advice: Time For Action Not Worry


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