Surviving crises

One of the driving forces behind the change in the way we advise our clients was driven by the realisation that we as financial advisers are in no small part in the crises management business.

It is important to acknowledge that crises will occur - it is part of the financial advisory landscape.

Crisis in financial markets in my experience generally has one of two different origins:

-       the impact of geo-political events and/or

-       the imbalances that build up within the financial markets from time to time.

We care about our clients and we care about how we advise them, we want to do the best by them as that's what being a professional entails. So when crisis occurs, conversations with clients become more challenging - work is never quite as much fun - and sometimes it takes very deep inner resources to maintain our professional perspective.

Over the 27 years I have worked in the financial advisory sector, we have navigated clients through the following crises with clients:

-     1984   removal of SMP's to the rural sector

-     1987   Stockmarket crash

-     1990   Gulf War

-     1994   Russian Bond Crisis

-     1997   Asian Crisis

-     2000   Tech Wreck

-     2000   Terrorist attacks on US

-     2002   Iraq War

-     2007   Global Financial Crisis

Based on my career, a financial crisis has occurred every 2.8 years. Each will be different as to its causes and effects, but one thing is true, they never last.

As financial advisers, we are in some part, in the behavioural modification business with our clients, often telling them when times are too good, that such times won't last and then when times are bad, that such bad times wont last either.

In my view investment advice can only be properly executed in a holistic environment - where we understand the clients' objectives and match their investments to their needs.

As financial advisers we always need to be mindful of what we can control and what we can't. We can't control financial markets, so it's important that we don't position ourselves with our clients in a way that leads them to think we have some special knowledge and capability in the selection of "the next best thing".

Crises are always a reminder that we should never under-estimate the need for diversification. Many financial advisers in recent times fell into the trap of providing clients with what they want, because that's far easier than giving them what they need, especially if what they need goes against the common belief of the day.

We are paid most by our clients when times are tough and they need their hands held. In order to do this more effectively, we re-engineered our business in 2007 towards a much greater emphasis on capital protection which has passed the test of its first crisis, and is designed to withstand the next one when it occurs.

Craig Myles, Director

Certified Financial Planner^CM,

MInstD.

Myles Wealth Management Ltd

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