Ferdi Booysen, Head of Client Solutions at Old Mutual Wealth
According to the EY Future Consumer Index, respondents are reprioritising their purchase decisions and spending less on what they perceive to be unnecessary goods for financial (49%) and environmental (30%) reasons. A majority (63%) of the 16 000 consumers surveyed say the new behaviours they have had to adopt since the start of the pandemic now feel “normal” and they want to make consumption choices that are born from aspiration rather than necessity.
It is important to build shared trust and create shared value for all stakeholders. Valuing long-standing relationships in the financial adviser community is essential for any product provider.
Old Mutual’s Wealth Integrator, our flagship financial planning tool, will give accredited advisers a clear competitive advantage as consumer preferences change. Our entire proposition is summarised in our Integrated Wealth Planning philosophy, which centres on co-creating a financial plan alongside clients that enables them to achieve their lifestyle goals.
We believe that there are four distinct considerations that, when focused on, will allow financial planners to develop a clear plan that will enhance their clients’ financial well-being.
The first of which, is to start with understanding the client’s current financial position and then determining their dreams and aspirations, and what quantum of assets are needed to achieve that. With this goal in mind, we then calculate the returns required to attain their desired lifestyle and finally consider how long they’ll be able to sustain their lifestyle.
A good financial plan is one that takes into consideration all four factors as they apply, uniquely, to every person. The ultimate role for any financial planner should be to help their clients grasp the relationship between these four numbers and how they impact their overall financial plan and it is important for clients to look at all the variables, in a level-headed, unemotional way, to fully understand the implications of their financial decisions. With our Wealth Integrator tool, we can calculate any one of these four numbers, if we have the other three.
This has benefits beyond empowering clients to co-create their financial plan, rather than being dictated to by an advisor. Key among these is that the Wealth Integrator tool demonstrates that the advisor has discharged his/her fiduciary responsibilities by offering prudent, impartial advice.
The challenge, of course, is to translate this holistic financial planning theory into a practical, useful, financial plan.
The ability to plug in different variables into the Wealth Integrator tool gives advisers and their clients unprecedented insight into how decisions today will influence outcomes in the future. This is a powerful aid in guiding clients in making the right decisions.