The lust of the eyes

My day started at an unconscionably early hour, delivering our two-year-old Volvo for its annual service to the main dealer.  It turns out that these car salesmen chappies are canny blokes.

I was ushered into a very comfortable customer waiting area, overlooking the main showroom.  A showroom abounding in shiny, untrammelled examples of the noble art of Swedish engineering.  I settled myself into a very comfortable leather armchair - so comfortable in fact, that it could have been manufactured by those same Swedes who put so much orthopaedic inventiveness into the driver's seat of my own Volvo.  I availed myself of a rather nice Americano to help fire up my sluggish synapses, and began to realise that I was located in a position that was clearly designed to exacerbate lusts of the automotive kind.

I don't need a new car.  Ours is, as I said, only two years old.  We like it very much - it does everything we'll ever want from such a vehicle, and does it with comfort, safety, reliability and economy.  Despite this clear understanding, within a few minutes I was wandering whimsically between the vehicles on show, inhaling that ennervating 'new car smell', inspecting the boot space, imagining myself behind the wheel of the XC70 - a superb AWD estate that I have absolutely no need of.  I caught myself as I found myself playing through justifications in my mind for what would be a ridiculously unnecessary expense.

Thankfully, I do have (barely) sufficient self-control, so that I did not need forcibly sedating in order to prevent me from ripping out my chequebook, and brandishing it, frenziedly, at the dealer.  But, as I returned to my armchair and the pile of reading I had brought with me, I did wonder again about the kinds of triggers that exist within me that so predispose me towards the utter folly of laying out crazy amounts of my hard-earned wealth, onto something that will depreciate like a block of ice in the Sahara Desert.  Or the kind of mentality that might make me so much less likely to set aside serious wads of cash into excellent-value, appreciating assets that will give my family and myself financial security well into the forseeable future?

Earlier this week, Parmenion and ValidPath completed the second full annual review of the ValidPath Investment Proposition, which we launched originally in Spring 2011.  So much of what we hear routinely about in our marketplace turns out to be poor-value, or ill-conceived, or deceptive or even plain dangerous.  So many advisers appear to have succumbed to the blandishments of product-providers, recommending wealth-eroding products to their clients, or trapping them in a kind of indefinite limbo of expectation.  Nearly ten years after the event, I am still providing much-needed emotional support to a client who invested (not through me!) in one of those olde Film Partnerships that never really worked as Counsel said they would.

So perhaps the problem with initiatives such as our VIP, is that they seem to be simply too unsexy?  Why wouldn't clients want to use something that just works?  Why wouldn't they want to minimise the cost of investing as far as one can reasonably expect to?  Why wouldn't IFAs be falling over each other to use something that ticks all the boxes, and just delivers value in spades?  And why wouldn't we welcome an approach to investing which frees us up to spend time with the client, instead of frittering our lives away on all the incidental stuff?

I think that part of the problem may lie in the way in which we present ourselves to existing and potential clients.  If the focus is on us and our own expertise and status, then the tendency will probably be towards the use of overly-complex and expensive products, with a higher probability of failure.  If the focus is on the client, and his or her objectives and aspirations, then it's more likely that we'll set our sights on simpler, more cost-effective and predictable solutions.  In a sense, the ratcheting of complexity correlates inversely with the degree of client focus.  And of course, if the emphasis is on the client, then this is something that he or she might actually find engaging or motivating - we don't need to wave around glossy brochures for insanely complicated products in order to get them interested.
ValidPath & Parmenion have just completed the second annual review of the ValidPath Investment Proposition
We've just updated our summary page on the subject -
so why not take a look?

Kevin Moss, 08/11/2013