According to IOOF, time and money are both valuable commodities. Financial advice, however, has traditionally considered money, such as investment returns above a benchmark, as the measure of the value provided to clients.
“The rich invest in time, the poor invest in money” – Warren Buffett.
Those who regularly read my articles will know how passionate I am about financial advice and how I truly believe there are many other ways our profession contributes to the wellbeing of clients. It’s a belief supported by our 2015 white paper – ‘The true value of advice’ which found that those who receive ongoing financial advice have 13 per cent higher overall personal happiness.
But why is this the case?
Money? Or the time to enjoy it?
Money and time have similarities. You can save, or spend, either and most people desire more of both. However, people with more time are usually happier. That’s the finding of one recent major study published in the journal Social Psychological and Personality Science.
The study asked over 4,000 participants whether they would prefer more money or more time. Not surprisingly, across six different scenarios, 64 per cent of people chose more money. Importantly however those who chose more time were happier, even when taking into account such factors as age, gender, income and even the number of children living at home.
Survey respondents who chose having more time over more money, were happier.
What’s more, when a group of the respondents were asked the same question again a year later, around a quarter changed their mind, suggesting that when they have time to reflect on their answer, many more value time over money.
It also demonstrates why you should consider time as one of the most valuable commodities you can offer clients.
The asset of ‘time’
Goals-based investing focuses on meeting the liability of a future lifestyle, as opposed to the simply maximising the financial returns of an asset. As more and more advisers embrace this approach, the idea of providing ‘time’ to your clients will join financial protection, asset allocation and tax strategies as part of comprehensive financial advice. And there are benefits for advisers too. An advice strategy which sets specific goals, such as having the financial resources to support spending more time with loved ones, and then tracks them, is important for clients and a genuine measure of the value you provide.
Every day your clients will face decisions which trade-off between time and money. In many cases they may not have an option however, when they do have a choice, the right path for a happier client might just be more time.
