When financial products masquerade as advice – where’s the value?

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For a financial planner, Scott Farmer can display startling apathy towards financial products.

Scott explained this recently when he and other Certainty Advisers were researching the April 2017 white paper What Price Valuable Advice? which highlights what sort of financial advice clients value.

“It’s pretty simple,” he says. “When it comes to the advice our clients value most in the work we do together, it has nothing to do with the financial products they have.

“This is at odds with what is offered today by the financial advice marketplace.

“Today, when most financial advice is fed off the back of a superannuation policy or insurance product, it has fundamentally failed the marketplace. It’s easily explained when you understand that payment for the advice is linked to the products used rather than the quality of advice received.”

For Bravium’s clients, advice is different.

Scott says that his advice client never tire of their discussions when they explore the things that are meaningful to them. “Even when I used to work within financial institutions, I knew I needed a model for advice that aligned the value my firm provided with the meaning my clients sought.”

Scott feels that after this meaning has been articulated, his clients’ only motivation is to adopt the disciplined behaviour required to manage their financial situations. This helps them best achieve meaningful milestones in life, and is what requires Bravium’s advice and support.

With Scott’s approach, if any financial product is required it’s value is only as a ‘means’ – rather than value in itself.

“If people are questioning the value for money of their financial adviser in second and subsequent years, it’s a sure sign that they, like most Australians, are in a product relationship and probably paying too much for too little advice.

“When everything boils down to the products people have and how they are performing, the value of advice will be much harder to determine.”

For Bravium’s advice clients, when everything comes back to a meaningful value for the client, valuable financial advice is much easier to measure.