Broccoli, Ice Cream and Why You Really Hired Your Adviser – The Human Side Of Money Presented By Client Care
I recently came across some research from Morningstar, presented by Ryan Murphy, their Global Head of Behavioural Insights. It asked a question I’ve been quietly thinking about for most of my thirty years in this profession: why do people actually hire a financial adviser?
The usual answer is a practical one. People come to us when retirement is getting closer, when an inheritance arrives, or when tax starts to feel complicated. Those are real reasons, but the research suggests they only tell part of the story.
Morningstar asked 623 households who already work with an adviser a simple, open question: “List some reasons why you hired your financial adviser.” They answered anonymously, which tends to bring out more honest answers than a question asked across a desk.
About a third of the answers were about specific needs, like planning for retirement or understanding tax. What struck me is that another third were about discomfort. People said things like “I don’t like making financial decisions” or “I don’t know enough to make the best choices.” Another 17% described what the industry calls behavioural coaching. One person admitted they lacked the discipline to stay invested when markets turned erratic. Another simply wanted “a sane voice” to bounce ideas off.
Put those together and most of the reasons were emotional, not technical.
This matters because other studies, including work by Vanguard, suggest that helping clients stay calm and stick to their plan can be one of the most valuable things an adviser does, sometimes adding more than 2% a year to returns. Most of that value comes from avoiding costly mistakes at the worst possible moment. Yet when people choose an adviser, it’s the thing they think about least.
Murphy compares it to broccoli and ice cream. Behavioural coaching is the broccoli: good for you, but nobody gets excited about it. Chasing returns is the ice cream. Interestingly, clients ranked “maximising my returns” lower than advisers assumed they would, and ranked feeling understood and well guided much higher.
None of this surprised me. The most important conversations I’ve had with clients were rarely about fund selection. They happened in 2008, in March 2020, and on ordinary days when someone simply needed to hear that the plan still made sense. Often the real work is listening, explaining things in plain language, and gently suggesting they leave things alone.
So if you’ve ever wondered what you’re really paying for, it’s partly the spreadsheets and the tax planning. But mostly it’s having someone beside you who knows your story, understands what matters to you, and helps you keep a steady hand when the world feels anything but steady.
That may be the broccoli, but it’s also the part that tends to make the biggest difference over time. If this has got you thinking, pop in for a coffee and a chat.
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Dirk Groeneveld, Certified Financial Planner
t. 083 261 9287
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Disclaimer:
This article is for information purposes only and does not constitute financial advice in any way or form. It is important to consult a financial planner to receive financial advice before acting on any information contained herein. Client Care and PWM and its directors, officers, and employees shall not be responsible and disclaim all liability for any loss, damage (whether direct, indirect, special or consequential) and/or expense of any nature whatsoever, which may be suffered as a result of, or which may be attributable, directly or indirectly, to the use of, or reliance upon any information contained in this article.
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