Top 5 Things I've Learned in 16 Years as a Lifestyle Financial Planner

Posted On 2019-11-13 Author: Dirk

Here we are nearing the end of 2019, another year nearly over and another year where capital markets have done very little. The only news we hear seems to be bad news be it locally or internationally, it is so easy to get despondent, what are we to do?
In the 28 years I have been in the Financial Planning industry I have only ever experienced this sense of helplessness and frustration once before. It was around 2001/2002. The market was flat and asset managers were not returning my calls. The dotcom bubble was bursting, and the Rand was in free fall.

Lifestyle Financial Planning Found Me

I remember very clearly having the realisation that this industry was broken and feeling that I really added little or no value to my clients, no matter how desperately I wanted to. The industry had let me down and I needed to find a way to change this or I had to get out!
As fate had it, I heard about a business called ipac who had introduced something called “lifestyle financial planning”. Having no idea what to expect, I flew to Cape Town and met Andrew Bradley. I explained my moral dilemma and then he explained what this new concept entailed. It was like a bolt of lightning, a sign from the heavens! I flew back to PE the next day and adopted this new way of doing business immediately and completely. As they say, “the rest is history”.

Why am I telling you this? Well let me explain. The ipac “lifestyle financial planning” concept was completely different to anything I had experienced in that there was a “process” which we followed. It included getting to know and understand our clients and what it was that they wanted to achieve/do in their lives. Once I understood this, their financial data was collected and put into a model which amongst other things would reveal the “real” rate of return that their investments needed to achieve over time for them to achieve their desired lifestyle. We would then place their funds into investment strategies which were specifically built through a thorough “process” to achieve the targeted real return. I didn’t have to pick funds, blend them or time the market anymore.

Stay Invested

Over the years these investment strategies have delivered, and we have many retired clients who are living according to their planned lives because of this. Many of them have been through 9/11, the invasion of Iraq, the global financial crisis, Marikana and now Zupta. On my advice, they were brave enough to stay invested and to continue to invest into the same investment strategies, things always eventually reverted to the norm, the “processes” worked and still do.

Top 5 Things I've Learned over 16 Years in Lifestyle Financial Planning

So many years on I look back and realise that we have been where we are before. I think about what has or has not changed and what lessons we and our clients can learn from the past. Here are things which I know have made the difference:

  1. Following the Lifestyle Financial Planning offering meant we followed processes; we had a process for facilitating our clients planning and there was a process on how the investment strategies were managed. Sticking to both is the single most important contributing factor to the success of our client’s outcomes and to our business.
  2. When things are at their worst, stay invested as this time will pass.
  3. Bad news sells - ignore it.
  4. When asset manages are pushing products or funds with guarantees stay away, 90% of the time you will be better off investing in the indices they claim to track.
  5. SA is in the top 3 capital markets in the world in US$ over the last 119 years.

Now is the time to be brave, to stay the course and to be patient. As financial planners this is when we earn our keep by helping our clients to stick to proven strategies and to their plan. We are in this together, we are your partner in you achieving your dream lifestyle. It is what we believe in deeply, you are why we exist, and you are our priority.

By Dirk Groeneveld

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