Where will advisers go? What tactical changes will they make?
You all tell your clients they should not worry about short-term changes, because you do not either.
But every long-term change starts as a short-term one. And when, or if, there is a shift, advisory models in particular are slow and cumbersome to adjust – just think about getting every single client’s written permission to make such a major change in their portfolio.
It is the everyday things; the things that become a fundamental part of the way we do business, that we seldom question on an ongoing basis because the pain of doing so is just too great.
But that just means if something profound does change, we are spectacularly ill-equipped to deal with the fallout.
It is incumbent on anyone who assumes the mantle of running money for clients – which of course is something that is quite a different discipline from the practice of financial planning – to not only question asset allocations and the skill of fund managers, but also the underlying assumptions that are the very building blocks of model portfolios.
Look, it might all be fine.
But I wonder if it is not a good idea to plan out a scenario for what happens if we do hit harder times, and if the foundations upon which we have built so many centralised investment propositions turn out to be based on assumptions that no longer hold true.
