Why we don't offer one-off financial planning and advice

Introduction

We often get emails from potential clients similar to the following:

"We are coming up to retirement, and we are looking for some one-off financial planning to understand our current position, but we're not looking for someone to manage our money on an ongoing basis."

As both James and I are in the business of helping people plan for a successful retirement, and financial planning is our passion, you may think we would be more than happy to help. However, one of our overriding objectives is that the value we deliver to our clients more than covers the fees we charge, and we have concluded that this is probably not going to be the case if we were to engage on a one-off basis.

Financial Planning: the value is in the ongoing planning

Let's start with the financial planning part of the email ("We are looking for some one-off financial planning to understand our current position").

At Pyrford Financial Planning, we follow the six-step financial planning process set out by the U.S.-based Financial Planning Standards Board (FPSB), as shown below. We both hold the Certified Financial Planner (CFP) designation, considered the global gold standard for financial planning, and we followed this approach as part of our CFP case studies.

FSPS six-stage financial planning process

This six-stage approach is considered iterative and is revisited periodically or when personal situations change. Much of the value we provide comes through the ongoing financial planning and review process, ensuring our clients remain on track in the run-up to and during retirement. Therefore, we would not feel comfortable providing sufficient value to cover our fees if we engaged in a one-off piece of work (covering stages Establish to Implement), ignoring the critical Review stage.

The Doctor and Structural Engineer

To use a couple of analogies from other professions:

1. You have injured your leg and go to see your GP. He identifies that you have badly torn one of the ligaments in your knee. You thank him for his time and hobble from the surgery. Of course, an ideal outcome would be for you to work with your GP to identify and plan a course of action (e.g. speak to a specialist/surgeon, potentially have an operation, undertake some rehab with a physiotherapist, have a follow-up with the specialist, etc.).

   
   

2. You have discovered a large crack in the outer wall of your house and engaged a structural engineer to diagnose what might be the issue. He identifies it is most likely due to subsidence. You thank him for his work and pay his invoice. Again, the best outcome would be to work with the structural engineer (and other professionals) to agree on the best course of action and, as importantly, to implement it.

This last point is important. Many of our clients lead busy lives and appreciate our support to ensure agreed action points are implemented.

"Managing money"

Regarding the second part of the email, "but we're not looking for someone to manage our money on an ongoing basis". We are not fans of the term "managing money" - our relationships are with our clients, and we often wonder how many people receive genuine financial planning or, instead, just a service that focuses on their investments.

The returns from an investment portfolio are key in ensuring the financial plan succeeds. We believe we have a robust, world-class investment offering based on much evidence and historical data. But we also feel that investment management is commoditised (the best investment solutions are often simple, low-cost and diversified), and we effectively give this service away at no cost. As mentioned above, the value is in the ongoing financial planning, and this is what we charge for, not to switch funds around in your portfolio constantly.

Sticking to the plan

Part of our reluctance to offer one-off plans is that we have no way of knowing the actual returns those engaging on a one-off basis might achieve, with many of those we have previously engaged with on a one-off basis having no framework in place for:

• Ongoing financial planning

• Investment management

• Keeping on top of changes in legislation

• Building and maintaining a sustainable retirement income withdrawal strategy.

• Dealing with declining financial literacy.

• A safe pair of hands if one half of the couple were to die.

  
  

We could build a financial plan with a client, but if they do not have robust frameworks, our assumptions and, therefore, the financial plan could be invalid. We previously felt apprehensive and uneasy after setting a client "free" after some one-off advice and financial planning, wondering if they would be OK.

Mandy Rice Davis

Mandy Rice-Davies famously commented: ‘Well he would, wouldn’t he’ in court when questioned over an affair with Lord Astor. You might think the same regarding our comments above - that it's in our interest to try and sell you an ongoing service. At Pyrford Financial Planning, we are very fortunate in that:

• We are 100% director-owned and do not have any sales targets.

• We are not a volume business and have more than enough clients to ensure profitability.

  
  

We therefore carefully choose who we work with and, as mentioned above, frequently turn down enquiries where we feel it would not be beneficial for the client to pay our fees. We understand that committing to an ongoing relationship can often be hard when you don't know what you will receive. We have two suggestions that may help you decide whether an ongoing relationship with Pyrford Financial Planning may be right for you:

1. Read Noel's book - Planning for Retirement: Your Guide to Financial Freedom. This breaks down our retirement planning process in detail, and after reading it, you may feel that you do not need to pay someone for some one-off financial planning and advice (although it's worth mentioning that people often read the book and get in touch to become a client). We are happy to send a copy after an initial call.

   
   

2. Unlike some advice firms, we do not charge exit fees if someone feels we are no longer the right financial adviser for them. Furthermore, if we are no longer providing sufficient value to cover our fees at any point in the relationship, we will refund you the last three months' worth of adviser fees and help you find a new home.

About Pyrford Financial Planning

Pyrford Financial Planning is an Independent Financial Adviser based in Weybridge, Surrey.

We specialise in retirement planning and provide independent financial advice, including pension and investment advice, and inheritance tax planning.

We offer a no-obligation introductory meeting, which will be held over Zoom.

Our office telephone number is 01932 645150.

Our address is No. 5 The Heights, Weybridge, Surrey, KT13 0NY.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Although best efforts are made to ensure all information is accurate, you should not rely on this blog for your personal situation or planning.

The value of your investment can go down as well as up, and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

About the author

Noel is passionate about helping clients plan for retirement, preparing and guiding them through this key life transition. He has written a book on retirement planning and regularly publishes retirement research on this blog.