What do Financial Advisors do?

what do you do

Recently we’ve been discussing at a company level – How to describe what we do?

One of the common answers is that: “We give our clients a peace of mind concerning financial matters.”

peace of mind

First of all, why do we not say, “we advise clients on financial matters?”

Essentially, the word ‘finance’ + ‘advise’ put together, has come to mean a very different meaning in Malaysia.

When someone say they are a ‘Financial Advisor’, it has come to mean they are either selling INSURANCE or UNIT TRUST (aka mutual trust fund).

selling

There are many reasons for this, compensation being one of them. The effect however is that we can’t use both these words together when describing our job. It is giving the different impression of what we do.

At the same time, “Peace of Mind” is so abstract, even Money Games can claim they give investors a “Peace of Mind” the first month they give dividend.

So what is it that we do?

The answer lies in what all of us want to do with money.

At this time, we can pinpoint two things:

survive

First is the need to survive. We need money in order to continue living in this world. We want to have enough to spend before we die. For this need, we look at what we already have, what we will have in the future, what we will spend on and what age we will most likely die. Basically a cashflow analysis and a retirement plan.

thrive

Second is the need to thrive, expand our horizons. We need money in order to experience more of life, we need money to give us the possibilities of life and we need money to be able to afford new life experiences. For this need, we look at what we already have and grow it.

The second need is actually closely tied to the first need. When we seek to grow our money, we also wish to grow it without risking our survival. If we grow our money with too much risk, we might lose it all. If we grow our money with too little risk, we might not have enough. In this case, we will need risk management plan and investment plan.

So essentially survive + thrive = we help people grow money with minimal risk. Since minimal risk is just a double-negative description of high certainty, it can be also said that we help people grow money with high certainty.

Most people don’t do cashflow analysis or retirement plan, basically it is uncertain if they can survive or not.

Most people also don’t seek out and compare all available risk management and investment options in the market, basically it is uncertain if they have optimised their money potential or not.

In fact most people are surprised at how much they do not know when they engage with us.

So essentially we help pay attention to the basics of survival and the complexities of thriving. We do this in a holistic and mindful way to offer an idea of what financial wellbeing can look like. And this is what we do.

zen

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