Why we do what we do at ProSolution

By January 17, 2017Financial Planning

This blog sets out why we choose to do the work we do at ProSolution Private Clients i.e. what drives and motivates us.

I hate to see people being ripped off by selfish advisors!

We have all read the stories in the newspaper. Investors put their trust in a “financial advisor” because they work for a well-known bank and/or brand name. The “advisor” recommends some investments because they pay high commissions. The investors eventually lose a lot of money meanwhile the advisor has moved on unpunished. These stories really upset me. My view is that if you are selling a product, just be honest about it and don’t dress it up as “advice”.

These stories occur almost always for only two interrelated reasons:

  1. People must appreciate the difference between a salesperson and advisor. When you approach a real estate agent you know full well that their job is to sell you a property so you employ a healthy level of scepticism when dealing with them. However, a lawyer typically only has their advice to sell you. As Warren Buffett says, “don’t ask a barber if you need a haircut.” If you want reliable financial advice you must find an advisor, not a salesperson; and
  2. Poor quality advice is almost always the result of a conflict of interest being present (i.e. the advisor wanted to sell an investment to get paid even though it might not have been appropriate for the client). All conflicts of interest must be eliminated. It is important that the only interest the advisor should consider is your best interest. Once all conflicts of interest are eliminated, the only things you need to consider are (a) does the advisor have the necessary knowledge and experience to help me and (b) do I like dealing with the advisor.

 Independent advice is rare to find

According to the ABC’s Four Corners program, banks own or control up to 80% of the country’s financial planners. How comfortable would you be if your family doctor’s practice was owned by a pharmaceutical company? No doubt that it would make you feel a little uneasy.If you are going to put your trust in an advisor, make sure they are not owned or licenced by a bank or product provider. Also, there are plenty of “independently owned” financial advisory business that make money from recommending certain investments. They may have ownership of the investment provider/manager (a high-profile SMSF specialst firm in Melbourne has this business model) or they receive kick backs from people like property developers.

You must deal with an advisor that has nothing to sell you (other than their advice) – be warned, there are are very few of us.

I believe it’s easy to help people become financially secure and independent

Adapting a quote from Einstein, I believe that a financial plan should be designed to be as simple as possible, but not simpler. That is, complexity should be avoided wherever possible but not at the cost of generating less wealth. Simple plans tend to be easy for clients to understand, easier to implement, less can go wrong, they tend to be lower-cost and lower risk. We articulate our clients’ financial plans on one page. It challenges us to produce the simplicity we desire. Many advisory businesses create complexity on purpose to justify higher fees and to ensure their clients become dependent upon them for help. I reject this selfish tactic.

Why we do what we do

My personal and professional goal is to help as many people I can to become financially independent and secure. What I look forward to the most is being able to reflect with clients after a period of time working together (say after 10 years) and together appreciate the financial and non-financial benefits that good quality financial advice makes. Personally, I find this very rewarding. At the end of the day, my team and I just want to make a positive long term impact on our clients’ lives. This is what drives us to get out of bed each morning. It’s exciting and drives us every day.

We are not driven by selling products, KPIs, profit, revenue and so on. These are all boring, short-term indicators that are largely meaningless in the long-run. Of course, as a business making a profit is a necessary consequence of what we do, but it’s not the reason we do it. Helping people is what ultimately creates meaning and purpose in life which leads to happiness. In a way, the more clients we help, the happier we become.

Also, I know that my firm’s long term success is highly dependent on our clients’ financial success. That is, if our clients are financially successful, so will we be. Therefore, the only thing we have to worry about is making our clients’ wealthier and the rest will look after itself.

The aim of this blog is to communicate what motivates us to do what we do here at ProSolution. I realise that it might come across as altruistic – but it is what it is – just an honest admission of our intensions.

We want to make a positive long-term impact on our clients’ wellbeing.

We only want to do work that we are proud of.

We are not interested in transactions or “selling”. Only fostering long-term relationships.