CacheFlo

Do as I say, not as I do. Are you taking your own financial advice? According to a recent piece from InvestmentNews, a 𝐪𝐮𝐚𝐫𝐭𝐞𝐫 𝐨𝐟 𝐚𝐝𝐯𝐢𝐬𝐨𝐫𝐬 𝐝𝐨𝐧’𝐭 𝐡𝐚𝐯𝐞 𝐭𝐡𝐞𝐢𝐫 𝐨𝐰𝐧 𝐞𝐬𝐭𝐚𝐭𝐞 𝐩𝐥𝐚𝐧𝐬*. So the answer is, not always.   I found this article interesting, but not surprising. It’s not a shock to me that this survey reveals that nearly all financial professionals agreed clients need an estate plan, but only three quarters of those same advisors had an estate plan themselves. Taking into account social desirability bias, I wouldn't be surprised that if survey takers had to prove they actually had an estate plan, even fewer would actually have these plans in place. 𝐖𝐡𝐲 𝐰𝐨𝐮𝐥𝐝 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐩𝐫𝐨𝐟𝐞𝐬𝐬𝐢𝐨𝐧𝐚𝐥𝐬 𝐧𝐨𝐭 𝐭𝐚𝐤𝐞 𝐭𝐡𝐞𝐢𝐫 𝐨𝐰𝐧 𝐚𝐝𝐯𝐢𝐜𝐞? There are some pretty complex reasons for this. I think there are many professionals in financial services that do not take their own advice. Depending on where they are in their career, it could even be unreasonable for them to take their own advice. Advisors and planners who earn commissions or charge fee-for-advice can experience income volatility and, at times, it can be quite extreme. For financial professionals riding an income rollercoaster, it can be very difficult to do as you would tell your clients to do.  Another reason some may not do as they say is behavioural. Financial professionals are humans too, which I find people forget. So they can be just as susceptible to common behavioural traits, such as present bias, where they value something they can have in the near-term over something they have to wait a long period of time for. We see this all the time when connecting the advisors and planners. Because the pros are knowledgeable about finance, they can assume they are less susceptible to these tendencies. But I find that thinking you’re immune to any human behaviour can actually increase the risk it’s impacting you. Do you know any financial professionals who haven’t taken their own advice for whatever reason? Have you ever found yourself in the same position?  * https://bit.ly/40fQSgq

I’m continuing on my thoughts from my post earlier this week about marketing holistic financial advice vs. actually delivering it. Check it out here 👉https://lnkd.in/gbTghQZT The irony is that spending more time on advice would actually lead to more products placed in many cases. But when it’s truly holistic, it’s more of a win-win scenario. So if a professional is saying that they give holistic advice, they need to ensure that they are. They need to make sure they go well beyond products and that they deal with both sides of the balance sheet. Or they need to stop saying they give holistic advice, and maybe team up with someone who can bring in the advice part so they can continue to focus on the products. There is nothing wrong with focusing on products, as long as it’s clear that’s the focus. There is nothing wrong with teaming up with various professionals to give clients what they really need. There is something very wrong about marketing holistic advice, and then only selling products once a client engages. CacheFlo #CashFlowPlanning #FinancailPlanning #HolisticAdvice

🤔 Does anyone else find that the word holistic is often misused in financial services? I see that word plastered all over many financial services websites that only manufacture financial products, and expect the financial professionals that work with them to focus most of their energy on products. This is not holistic. In fact, I see a lot of websites and posts that indicate the professional for the firm gives holistic advice (but doesn’t really) because it sounds like what people want. Maybe there is a term for the wealth + insurance capabilities. But “holistic” isn’t that term. Holistic means to encompass the whole thing or, in the case of financial services, the whole financial situation. This cannot possibly happen with products alone. I also think that holistic financial advice or planning cannot generally be devoid of financial products, or at least can’t often be executed without products. Much of the holistic advice a client may receive may require the use of bank accounts, investments, or insurance to take action. Fee-for-advice planners would benefit from creating referral relationships with product manufacturers, or other financial professionals who focus on products to increase the likelihood that the client takes action. What do you think? Do you notice this? Does this bother you too?