Henk Appelo, Liberty Investment Product Designer
I’ve met many Financial Advisers working out in the field who can confirm that they have previous backgrounds working as professional money managers in one capacity or another. When you ask them about why they wanted a change of career, their reasons are usually the same: They wanted to work with people, not numbers.
Let’s talk about the difference between simply managing a client’s money and making a personalised plan work for them to create the life they want. When talking about financial planning, a money manager would have no problem pointing out that markets always go up in the long-term, despite short-term shocks.
We know, for example, the 2008 financial crisis was followed by a period of strong global economic growth, starting in June of 2009. This led to the longest bull market in US Stock Market history, and the US S&P 500 index produced 13% annualised earnings growth in US Dollar terms during this 11- year period according to Goldman Sachs.
The same applies to the post-covid markets recovery. The Johannesburg Stock Exchange has rebounded strongly following the initial shock of lockdown and is now factoring in long-term growth.
But as an Adviser, you’ve got to ask yourself how does this long-term financial thinking connects with a client’s own personal goals and time frames? This is a completely different problem to solve because every client is different, and it is in grasping this idea that lies the very art of advice.
Never have there been more opportunities on offer for investors to choose from as the global economy becomes more interconnected. This can be confusing in a world where some are even advocating cryptocurrencies as a home for people’s life savings. Going at it alone can be overwhelming; choosing what to invest in and when without truly understanding the possible outcomes can be scary when it’s client’s money that is involved. We know that planning for a person’s future should involve all the multiple dimensions of their lives. We want to help them to achieve their goals, whether short or long-term, by guiding them on their journey with personalised financial coaching.
To help advisers, we have built a goals-based investing tool that is simple to use and that creates easy-to-understand investment proposals. It includes five multi-strategy investment portfolios. Powered by STANLIB, each portfolio has been designed to deliver on performance and combines a diversified set of carefully selected uncorrelated strategies to ensure the best outcomes for clients in ways that suit their particular lives.
With this tool, an adviser can help identify and match a client’s life goals and objectives. By understanding what they need or want their money to achieve, an adviser can create a personalised plan to help a person reach their life goals.
Life doesn’t follow a straight line. With regular goal reporting and feedback, a client can adjust their investments accordingly. The benefit of this process is that, should their goals or circumstances change, the adviser can intervene to change the choice of portfolio by simply switching to a portfolio more aligned to the client’s revised goals.
Like the COVID-19 pandemic has shown us, there are no guarantees that the future will resemble the past, at the same time as we’ve seen history tends to favour long-term investors. Our multi-strategy portfolios have been designed to deliver on performance and combine a diversified set of carefully selected uncorrelated strategies to ensure the best outcomes for clients, in the way that you have chosen to best suit their outlook. Trust that when the cycle is right, the solutions will be there. New opportunities could even surface amidst the chaos and crisis’ that come with the longer road.
Clients lives and their long-term goals never run in that smooth straight line that we all like to imagine they will. But with goals-based investing tools that accommodate flexibility along the way, an adviser can adapt strategies to not just cope with circumstances, but actually help their clients prosper at every opportunity.