Targeting your advice

Originally published | 6th July 2016

There are lots of phrases and terms that are used in financial planning that can not only confuse a client but can confuse advisers as well.

One of those is scope.

When the Best Interest Duty was enacted on 1 July 2013, there was a 9-step process, known as the safe harbour, which was set out to assist the adviser in demonstrating that they could meet the legislative duty.

Step 2 of this safe harbour is to identify the subject matter of the advice sought by the client. This identification is the scope of the advice.

So, what does it mean to scope your advice?

Have you ever watched a hunting program, a documentary or even Olympic shooters?

Look at how they have their rifle set up. You will notice at the top of the rifle there is a device, called a sight or a scope, which helps them to identify their target clearly.

If the shooter looks down the top of the barrel of the rifle, they can see everything in their sight, but if they look through the scope, they can focus more carefully on what their actual target is.

This is no different in financial planning. When you are seeing a client, whether it be for the first time, or a review, you will have a myriad of different strategies that could be addressed, but some of these may not need to be addressed at that specific point in time.

So what do you, as the adviser, do? Do you try and address everything, or do you target specific areas that are highly important to the client at that time?

The answer in most situations is the second choice. You look through the client’s personal and financial circumstances and scope out those areas that are not vital to address at that specific time.

By doing this, you can provide more appropriate advice that is fit for purpose and provides substantially more value to the client.


No comments yet. Why don’t you start the discussion?

Leave a Reply

Your email address will not be published.