By David Lamb CFP™ MCSI
It is a momentous week for Lamb Financial. For it’s exactly 30 years since I launched the business which went on to become Lamb and Associates (now Lamb Financial).
And what a week the first week in February 1992 was. In other news, Foreign Secretary Douglas Hurd signed the Maastrict Treaty that formed the EU, Her Majesty The Queen was celebrating her Ruby Jubilee and a certain Kevin Keegan was named Newcastle United’s new manager.
The average price of a house in the UK was £56,500 while petrol cost around 40p per litre. Meanwhile George Michael and Elton John were number one on Top Of The Pops with ‘Don’t let the sun go down on me’.
The cutting edge of communication was the fax machine, while our computer was an Amstrad PWC 8256 that you had to stop from printing if you needed to use the telephone as it was so noisy.
If we needed to obtain a quote or illustration we faxed the life insurance company, who would then post it. Incidentally those illustrations did not reflect the actual charges for the product but merely ‘industry averages’.
Commission disclosure was rightly introduced in the mid ’90s and – even better – in 2012 advisers had to agree their fees with the clients.
At least 20 insurance companies had offices in Newcastle. Now only three names remain, and none have local offices.
Along the way there have been a few scandals – Equitable Life, pensions mis-selling, PPI and most recently the Neil Woodford saga. Many of those involved with these scandals have long since left financial services and, generally, the standard of advice is much higher.
But financial services is an industry geared to selling products and not a profession (yet), and will remain so until advisers do not rely on selling products to earn their income and provide genuine, impartial financial planning advice.
Over the last 30 years I have learned a lot, including:
- Product providers, by their nature, want to sell products. They are not really interested in financial planning, which should be left to well qualified professional advisers, with no links to the product providers.
- Most active managed funds do not provide good value for money. A mix of generally passive funds with an asset allocation structured towards the client’s individual risk profile and their objectives is much better.
- It is not up to me as a financial planner to determine if I provide value for money for my clients; it is up to them. I should ask them on a regular basis if we are achieving this.
- The financial services industry has brainwashed people to believe that financial planning is about financial products, and many financial advisers do not realise this. Financial planning (especially lifestyle financial planning which we specialise in) is not about money or financial products, but about using a client’s resources – not just their money – to support the way they want to live their lives.
- There are more important things in life than money: health, relationships, and time being the top three.
- It is important to focus on a balanced lifestyle. In my early years with the business I regularly worked more than 12-hour days and many evenings, only cutting back when my son was born. Running a business takes a lot of focus and energy. It is important to keep these in perspective.
- Many of my clients have been with me for much of my 30 years (and many I’m honoured to call my friends, not just clients), and their objectives change over time. When we set out together, some wanted Porsches and Ferraris. When they get older, relationships and time are more important than the flash toys.
- More people come to us wanting more time than more money.
- Most importantly, all clients want to know how much is enough? Enough to give them the lifestyle that they want, without the fear of running out of money, whatever happens. No financial advice should be given until this is known.
There are many other things that I have learned over the last 30 years that have helped me develop a lifestyle financial planning business that I am proud of.
As a Certified Financial Planner accredited by the Chartered Institute for Securities and Investments – one of four firms in the North East and only 67 nationwide – I am confident that we are now one of the leading businesses of our type in the North of England.
The final lesson? Time flies when you are having fun!