April 11, 2020

The more things change, the more they don’t

Featured image for “The more things change, the more they don’t”

It’s that time again when many commercial organisations are looking to kickstart their year off with a big marketing event so that they can display their wares in a good light and, hopefully, generate substantial new business volumes over the coming 12 months. Its a new year, but the behaviours are the same. The more things change, the more they don’t in consumer marketing.

The Financial Services Industry is no different. In the next few weeks, if past years’ experiences are likely to be repeated, I will receive invitations by at least 6 different investment fund managers to attend their 2019 investment conference. While some of the content is interesting, even for those not involved in the investment sector, the underlying theme will have a punchline of promoting either a specific investment fund or a specific investment product with the goal of generating a targeted profit for that financial institution. It seems the more things change, the more they don’t.

Nothing wrong with that, you might say. All industries and the organisations within them exist to make money. And so it should be – this is the essence of capitalism, assuming of course that you believe in capitalism.

Over the years I have seen specific marketing agendas of Managed Funds, Consensus Funds, Tracker Bonds, Property Funds and even Geared Foreign Property Funds. The latest fashion is now the Multi Asset Fund. All were, are and most likely will be presented as if they are the new Manna from Heaven – the solution to every investor’s problems. Assuming, of course that investors knew they had a problem in the first place.

The truth is that these funds are manufactured with a view to charging investors an annual management fee so that the financial institution can generate an increasing and steady stream of income. Again, nothing wrong with that – capitalism at work.

But here’s the thing. How many investors know if Fund A or Product B is actually suitable for them and their personal circumstances? How many potential investors and actual investors have undergone an in depth analysis of their requirements before blindly writing a cheque in favour of one institution or other? In my experience, most potential investors rarely have got asked the most basic of financial planning questions, which is, what are the most important issues in your life now and into the future? It is only through knowing the answers to these questions can any potential investor and their adviser start to comprehend how a person’s finances can and should be structured.

The next step, again before any investment is contemplated, determine what the future financial cashflow needs will be by analysing income and expenditure as well as assets and liabilities to determine what the required investment rate of return is needed and what cash is needed and when it is needed.

Nevertheless, if you are dealing with a so called financial adviser who does not use such an approach, prepare yourself for a phone call, email, letter or brochure delivery in the first or second quarter of 2019 as the annual mimicry of financial institution marketing lines take place. All on the pretence of undertaking a good financial review. The more things change, the more they don’t. If, however, you are fed up of the same old product salesmanship approach then maybe you need to speak to a real financial planner who actually has your interest at heart and not their own, or even a financial institution.

Warning: The value of your investment may go down as well as up. You may get back less than you invest.
Warning: Past performance is not a reliable guide to future performance.
Warning: If you invest in this product you may lose some or all of the money you invest.
Warning: This product may be affected by changes in currency exchange rates.
Warning: If you invest in this product you will not have any access to your money for the period between now and eventual retirement claim.
Find Out How We Can Help You

Improve your financial future by arranging a call back or online meeting.

Simply book yourself into an appointment at one of our available times.