All financial advisers and financial planners will base their advice on facts about you, your personal circumstances and your family. If you don’t disclose all the facts about your circumstances to your financial adviser then this can compromise the advice given.
It is my belief that some people do not understand the role of a financial adviser fully and apportion sums of money to be looked after by a financial adviser and others to be held back and managed themselves. They may have had a bad experience in the past using a financial adviser and for that reason don’t want to put all their eggs in one basket. By not telling their adviser about other assets they maybe feel this is a way of avoiding those assets migrating to the management of a financial adviser they might not fully trust.
It might be as simple as the financial adviser not fully explaining the types of plans and products they can advise on and therefore their client may think a plan or policy they hold elsewhere does not come under their remit.
Many people are unsure of what is relevant to an adviser and what isn’t. If it can have an impact on your quality of life, your long term goals or your family, then it is all relevant to your financial adviser when generating a financial plan for you.
The management of total wealth against your agreed risk profile means it is important for the adviser and the client to understand the risks involved in any investment and the potential impact that can have on their quality of life.
For example if a client was to hold back information about a cash deposit they have of £100,000 this may greatly change the risk tolerance of the client and therefore the adviser may recommend a more cautious approach to investment than is needed. This may result in lower returns than could have been achieved over the same period.
Equally a portfolio of shares which are generating income which has not been disclosed could mean the adviser has positioned the remaining portfolio in assets which are too far up the risk scale and does not diversify enough to offer protection of capital or income if markets fall suddenly.
Whatever the reasons for non disclosure, to receive a full and proper advice service it is important to provide as much information as possible to the adviser.
The quality of financial advice has improved considerably over the years with advisers being asked to do further exams and increased levels of professional development.
The consideration of total wealth within financial planning is at the heart of the advice process. Single product sales in isolation without an ongoing management service are generally no longer accepted as good practice.
The availability of products which can manage your total wealth and not small portions in isolation means investments can be held viewed and reported holistically making sense for consolidation of assets into a single financial plan.
For some people I believe these changes within the industry have not yet filtered through and they are not seeing the real value in contacting their adviser and updating their personal circumstances on a regular basis. It can become a chore to update your adviser with all the information required on a regular basis. It is often all too easy for the client to assume the adviser knows everything they need to know about them, when in fact there is a lot of information withheld which can have a significant impact on their financial plan.
At Lyndhurst our clients have access to a number of tools which can help them keep track of their financial plan and the information we hold in regards to creating and monitoring their financial plan on an ongoing basis. One such product is our Lyndhurst My Planning service.