The Future Value of Good Advice

The other day, my father asked me for a small favour. I was asked to deliver some documents to an office very near my university.  He told me that I was going to meet his financial advisor. When I visited the office and got his business card, I thought that his job title was very cool. It was:  “Wealth Management Advisor”.

Not knowing enough about that kind of business, I decided to ask him a few questions. When I enquired about the services they offer and how they approach their customers, he told me that “people, throughout their working lives, had invested into various company pension schemes. Their money is scattered into numerous pension funds, making the process of monitoring their performance a full time job for the individual concerned”.

His company is able to combine all these funds under one roof and recommend investments into various pension and hedge funds. The outcome of the advice they offer, can be the difference between a comfortable retirement and an expensive financial mistake, whose implication will be felt well into the client’s financial future.

I must admit that, until that moment, I had no idea what he was talking about and after the meeting I made a promise to myself to find out more about that line of business. I am now certain about one thing: Selecting a wealth management advisor can be risky. The price you may end-up paying for wrong or misguided advice could be very dear, especially when the “family silver” is invested in the funds they recommend. Therefore, the relationship between the client and the advisor must be built on trust and must become very personal.

We face the same situation when it is time for us to choose what to study and where.

As students, we are at an age where, we do not have to worry about wealth management services, yet. We are the NINJA generation, according to Gordon Gekko. “No income, no jobs and no assets”.

But we are desperate for good advice. Like in the wealth management services, the value of that advice can only be evaluated after some time has gone by and the advice has been put to its proper use.

It is obvious to me that, every day we come across different people, such as tutors, mentors and classmates. By interacting with them, we absorb a lot of information which can be considered as guidance. The question is: What do we do with all this advice? I believe that, it is our responsibility to convert that advice into valuable knowledge and the knowledge into actions as Confucius said: “The essence of knowledge is, having it, to apply it; not having it, to confess your ignorance.”

Although the future value of the good advice will take time to discover, the present value of the good advice can be very small. It is in fact, free. The only thing we have to do is ask for it.

Ellie Fanis

BPP University College

This post first appeared in The Accountant (April 2012)