With all the excitement over the last few weeks about the World Cup 2018 it seems an apt time to use this to relate to everyday people the role of a Financial Adviser. Now I’ve often said that I’m #notablokeinasuit, and to be fair I’m not the greatest football fan – but it is a massive part of many people’s lives and cannot be completely ignored.
But how on earth can you compare the job role of a Financial Adviser with that of a football manager? – let’s see if I can use the analogy to explain better what it is that I do all day.
A professional football team needs a manager to bring together the strengths and talents of each player to get them to perform as a team. He motivates, provides strategy and amends the direction of the team to suit the opposition they face as the game progresses – and yes, it is likely to be a ‘he’ as female football managers are even more outnumbered than we are as Financial Advisers!
In the same way, your financial adviser will use their expertise to track market activity and use tools available to them to help your money grow. They will support you to make the right choices, monitor progress towards your goals and make the necessary tweaks along the way to get you to the end point you desire.
What’s your goal?
A football team generally has the same strategy – to score goals, and win the match – but sometimes, it can just be a question of not losing. The consequences of loss in a knockout tournament like the World Cup is completely different than in a league match and as such, the manager may choose a different strategy or combination of players depending on the match to be played.
The same goes for your investments, if you have a long time until retirement your adviser may recommend a different strategy than for a client who will retire in 5 years, or who is saving for their first home.
But the key thing is that you review this with your adviser annually – rebalancing your portfolio when needed to check that you are still on track for the right amount of money to be available at the right time – making little regular adjustments if needed and taking advantages of the tax breaks that boost your savings pot.
A good football manager uses skill and strategy to make changes throughout the match, defensive, offensive and the swapping in and out of subs depending on the progress of the match and the results they are achieving – rebalancing the team to provide the optimum outcome.
Who is in your team?
In a successful football team, you need players to fill different roles – you can’t have 11 defenders and expect to win the game.
A balance of assets in your portfolio will enable you to benefit from continued growth and reduce your exposure to loss – diversification across asset classes, for example, using a mixture of shares, bonds and property will mean that you have potential for growth, whilst preserving value during times of economic turbulence. In the same way, most advisers will recommend a balance of UK and worldwide assets so that an economic boost (or downturn) in any one country does not cause massive fluctuations in the value of your investment.
This may mean that if you hold a large number of shares in one company – you may have bought them, or been given them through an employer’s share save scheme – that you need to put some money into something with a less risky profile to balance your portfolio. Your adviser can help you with this.
It isn’t over until the final whistle.
Every football player (and fan) knows the result can change right up to the final whistle and that it’s never too late to give it your best shot.
You may feel you’ve left retirement saving too late, or that you can’t put enough away to make a difference – but you may find that your state retirement pension will cover most of your essentials in retirement, and so you may be closer than you think to a comfortable retirement.
Retirement Planning – is it time to assess the state of play?
