Sunél's Blog | What matters most

Sunél Veldtman, | 26 April 2024

I’m often asked why I don’t write more about investments. Because I’m steeped in investment knowledge and experience, the assumption is that I can add more value to readers by writing about technical matters, rather than the ‘softer’ matters, such as life and wellbeing. To be fair, I often ask myself the same question.

The truth is, I’ve realised that investments are the easy stuff. I don’t mean to say that there is no skill or value in this area.  There’s a lot of skill involved in good portfolio construction, starting with getting the basics right, like asset allocation and diversification. But, over time the value that the best portfolio constructions can add, in the hands of good investment managers, occupies a fairly narrow band.

Industry players and the media want you to believe that they can derive significant benefits from forecasting economic data or company profits better than others. Truthfully, this often adds more to their egos than it does to financial fortunes.

In addition, unregulated past practices, like insider trading, used to pay handsomely – their successes still resonate today.  However, these days, access to such information is strictly controlled by regulators.  Regulation has tightened, even in areas like tax planning, where financial advisors used to be able to add a lot of value. Nowadays there are fewer tax reduction ideas to benefit from.

So, the shift in my attention from investment management and technical financial planning to broader involvement in clients’ lives has been deliberate. It is a result of where I believe I can add the most value to my clients.

Regulation changes and the disorientating array of product offerings available to clients mean choices have become more bewildering.  Choices have also grown in response to the complexity of client’s lives.

This is where I believe I can add significant value – by helping clients focus on what they can control.  Specifically, on the life choices, often excruciating, that they may need to make.  These life choices may be between funding a parent’s cancer treatment and some retirement dreams, or between a home that can comfortably accommodate all the children and global portfolio protection; the choice between peace and the divorce settlement needed. Making the choice, for example, to stay invested in portfolios when it feels like your world is ending, can be a hard one, but it may also be a life-changing.

The choices we make with our money, how much we save and for how long, and how much we spend have far more impact than the investment portfolio we choose. These choices matter more because they have huge financial implications, that people are often blind to in the moment.

Helping clients navigate these choices demands  ‘soft skills’. These include listening, reflection, decision-making frameworks, courage, and grit. Making sense of the complexity and then distilling that information into sound financial choices is a foundational value I can add in today’s uncertain world.

Stepping away from operating in a strictly financial framework with clients has required courage and upskilling.  Improving my soft skills has meant more learning, often accompanied by uncomfortable growth. It has meant stepping away from a system I know and is widely practised, into the unknown, believing it is the right direction but without proof yet.

I am beginning to see that proof, and it is incredibly rewarding.  Perhaps there is something that you need to step away from or start doing differently.  This new direction may be the place where you can add the best value, for your clients, your family, and yourself.

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Kind regards,