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I really enjoyed this podcast from @Retirementals_
It is a centred around a healthy disagreement on the financial advice.
I now feel I have been insulated from other viewpoints on the profession and I would love to hear more conversations like this!
My thoughts
https://twitter.com/Retirementals_/status/1349623330500976640
It is a centred around a healthy disagreement on the financial advice.
I now feel I have been insulated from other viewpoints on the profession and I would love to hear more conversations like this!
My thoughts
https://twitter.com/Retirementals_/status/1349623330500976640
1/ @paullewismoney's use of the phrase 'wealth tax' seems valid when an adviser is passively skimming their fee off the top each year, with no real planning or management being done.
Paul also has a gripe with restricted advice and labels them 'salesmen' - again, seems valid.
Paul also has a gripe with restricted advice and labels them 'salesmen' - again, seems valid.
2.1/ @AbrahamOnMoney's counterargument is that the benefits of 'good advice' more than outweigh the % fee.
A recent example is ensuring clients did not sell at the bottom of the downturn in 2020 - which could have done irreversible damage to their net worth.
A recent example is ensuring clients did not sell at the bottom of the downturn in 2020 - which could have done irreversible damage to their net worth.
2.2/ Shielding a client from one bad decision could more than cover that advisers 'wealth tax' for the clients lifetime.
3.1/ My question is, what about the opportunity cost of not getting advice?
3.1/ My question is, what about the opportunity cost of not getting advice?
3.2/ A retail investor then has to navigate the financial industry - which is set up to extract value from them - and develop competencies in a lot of different areas to try and get through life without any serious blunders.
3.3/ I'm studying pensions at the moment, the tax and flexibility rules alone are a lot to take in.
The increased flexibility leaves a lot of room for a retail investor to have a detrimental impact on their own retirement or inheritance plans.
The increased flexibility leaves a lot of room for a retail investor to have a detrimental impact on their own retirement or inheritance plans.
3.4/ What is the retail investor missing out on by having to spend evenings and weekends working all of this out?
- Irreplaceable time with their families?
- Lost sleep from the increased stress and responsibilities?
- Less time to concentrate on their business?
- Irreplaceable time with their families?
- Lost sleep from the increased stress and responsibilities?
- Less time to concentrate on their business?
4/ I appreciate that advice won't be right, or affordable, for everyone.
However, when we look at the opportunity costs and the peace of mind attainable from 'good advice', this must result in a positive sum outcome for many clients.
However, when we look at the opportunity costs and the peace of mind attainable from 'good advice', this must result in a positive sum outcome for many clients.
5/ There is also a positive trickle down effect from wealthier individuals utilising advisers.
By supporting the profession, it allows advisers to publish free information online for those who cannot afford advice.
By supporting the profession, it allows advisers to publish free information online for those who cannot afford advice.
6.1/ The phrase 'wealth tax' may be inflammatory, but I do not think it is inherently a bad thing.
If it results in people critically thinking about the advice they are receiving, then it could lead to better client outcomes.
If it results in people critically thinking about the advice they are receiving, then it could lead to better client outcomes.
6.2/ However, in life all decisions come with opportunities costs.
Therefore, it is vital that people critically examine both sides of the argument, before avoiding advice simply to save on the fee.
The cost of doing so could be much worse than the fee itself.
Therefore, it is vital that people critically examine both sides of the argument, before avoiding advice simply to save on the fee.
The cost of doing so could be much worse than the fee itself.
Thank you for reading, if you have any thoughts on the above I'd love to hear them 
Also, please do let me know if there are more podcast episodes out there with a healthy dose of disagreement on the profession!
Also, please do let me know if there are more podcast episodes out there with a healthy dose of disagreement on the profession!
