What does a financial adviser really do?
I often have conversations with people who struggle to understand what it is, that a financial adviser does. Questions about who or how I can help… I’ve done my best to explain, but by the time you mention superannuation, debt reduction, investment portfo… well, let’s say it’s a very one-sided conversation.
Over time, I discovered the best way to explain what I do, is by drawing similarities between other better-known occupations. I’ve used swim coaches, architects, doctors… but the profession that I find the most relatable to what I do, has been the London Black-Cab Taxi driver.
A Black-Cab Taxi, for the uninitiated, is the premier cab service in London. Drivers are required to pass a 350-year-old test known as ‘The Knowledge’. It examines an aspiring cab drivers memory of 320 routes, 30,000 points of interest and their recollection of the streets of London1 . Black-Cab drivers can get their customers to where they want to be, when they want to be there and their reputation depends on it.
So the analogy goes something like this…
Let’s say that you arrive in London Heathrow Airport and you have an 8-hour stopover before a connecting flight to Italy. But being the adventurous traveller you are, rather than twiddling your thumbs for the afternoon, you make a snap decision to take a trip into London.
You have three “must-go-do” places on your itinerary. You want to …
- Go round the London Eye (which will take about 45 minutes)
- Walk through Hyde Park from Buckingham to Kensington Palace (at a leisurely pace… 60 Minutes)
- And you want to spend a couple of hours having lunch in Soho to “people watch” (who wants to rush this?)
That’s a tight squeeze, but achievable. Your options for transport for the day are, hiring a car and use a tourist map (effectively DIY), use the public transport network (a one-size-fits-all approach), hire an ordinary Mini-Cab (unknowledgeable), or your Black-Cab driver (silver service).
There is also an “El Dodge” tour operator who works out front of the airport in the family minivan (unauthorised). It’s a free tour, but realistically it’s a trip straight to the family-owned souvenir shop to spend 90 minutes looking at knockoff dinner plates of Harry and Meghan, before being shuttled back to the airport via a short tour of London’s industrial estate.
Now for the sake of this analogy, the population of England don’t speak your language and all the signposts, maps etc. are written in what appears to be hieroglyphics.
The best-case scenarios, where all the stars align, no wrong turns, missed stops or getting lost etc. any of these methods of transport will get you back to the airport well before the scheduled flight to Italy.
This option theoretically gives you a 2-hour buffer before your flight, but after taking an hour get to, and hire the car, you effectively have to replicate the route of the Black-Cab Driver all day and not make a wrong turn. This approach may make you feel like you are in control, but, for all you know, you could be heading away from your destinations and you won’t know until the time whittles down for your next flight.
With this approach, you should make it back to the airport with an hour to spare, but it is going to be tight. Catch the wrong train, miss your stop, a wrong connection or cancelled service, will all spell disaster for the day and potentially your next flight. Stressed? Making “on-the-go” adjustments to your itinerary, by cancelling an attraction or reducing time spent at them, are all considerations for that Italian flight when you get into trouble.
They do not know their way around London half as well as the Black-Cab driver, and because you speak with an accent, there is every chance that he is taking you on an extended trip to maximise the fare. Most likely you don’t get to see everything you want, have an unpleasant experience and spend a lot more money on your cab. You could make it back to the airport with 90 minutes to spare, but it is at the expense of only having an hour for lunch, or the stroll through Hyde park turns into a bit of mid-afternoon cardio.
Their reputation depends on their ability to know London city like the back of their hand. They can make sure you have your binoculars for the London Eye, they know a hire shop, an umbrella in case it rains for your walk through Hyde Park, there is one in the boot, and recommend the best restaurant in SoHo, it’s one of the 30,000 attractions they have committed to memory. They may even recommend a pint at “The French House” or a short cruise down the River Thames because you are ahead of schedule. Even with the added stops, they are still getting you back to the airport with 60-minutes to spare!
Well, this is what a good financial planner does.
London City is effectively the financial markets. The language spoken is economics, policy and government legislation. And the items on your itinerary are the equivalent of your financial goals. The route that you take is the financial plan used to achieve your goals. As is the case for getting around London, there are also many ways of mapping your financial future, formally or informally.
A financial planner can help change course if something unexpected comes up, recommend strategies that maximise your resources and opportunities, and set expectations according to your requirements…
They can help you make more informed financial decisions, take the stress out of planning for life’s transitions and give you the confidence to take the next steps towards your dreams… kind of like a Black-Cab.
Navigating finance is not a trip everyone wants to go on, but one way or another, it’s a trip you will be required to navigate. All you have to do is decide on your preferred method of transport and be satisfied with the results.