How we talk about money: part one of a series of conversations

The planning of personal finances and being open and honest about money as a key part of that, will always be an important part of life. The curve of one’s financial horizon differs from person to person, but it’s nevertheless inescapable. As partner at The Collaborative Fund, author and former economics columnist, Morgan Housel notes, “two topics impact everyone, whether you are interested in them or not: health and money¹.” Your financial position can often dictate your whole wellbeing, making financial planning and being open about money ever more important.

This is particularly relevant in the UK, where three-in-four teachers say most students leave education with no key financial skills², and in which over one-in-two UK adults (28.4 million) say they are more anxious or stressed due to the cost of living³. In a series of conversations, Hazel Bowen, Senior Wealth Planner and Harry Schofield, Investment Director, explain how Canaccord Wealth Management speak to clients about their money and how they try and make financial planning and investment management as accessible as possible.

As a wealth planner, Hazel, you’re concerned with the long-term horizon for your clients. But do you experience any difficulties when first talking to clients about their wealth and what it means to them?

Hazel Bowen (HB): Sometimes, when clients come to see me for the first time, they have a specific question. They often assume that they can only ask me about that one objective. It might be, ‘I've got a pension I need some advice on’, for example. So it's important to explain to clients that, as a financial adviser (or wealth planner), I am here to help them, and it's more about what they need from me.

When I start our meetings, it’s about you telling me about your life because, using the same example, your pension is just one aspect of it. Instead, let's work out your big picture goals, and how we're going to make all your wealth work to help you achieve those. Not many clients expect this when you start a meeting, so it just requires some guidance. Most people engage with this conversation because it's straightforward. Money isn't there just for the sake of it, it's there to give you your best life.

Harry, do you think that differs from the perspective of an investment manager when you first start talking to your clients?

Harry Schofield (HS): I don't think so. Part of the skill set of financial planners, and to a degree investment managers, is to translate what clients are saying to you, which often isn't in financial terms. Translating those goals and objectives into a coherent financial planning strategy and investment portfolio is an important task.

The industry has a habit of talking in jargon and at those initial meetings, clients are sometimes unsure or not as confident as perhaps they could be because of the language used. It's about breaking that down into language they firmly understand, whatever level that may be, and giving them plenty of time to ask questions. I try to create the best-informed client I can because they, ultimately, make the best decisions.

When you finally speak to clients about what their wealth means to them, what are some common themes?

HB: It varies, obviously, as each client is different. But there are some key themes. As you would expect, usually family is quite important – either immediate family and children, or as you explore conversations with clients, you often find that there are concerns for wider family members that influence their goals. It could be that there's an elderly parent who needs support, for example. Or they may need to be mindful that if they have big plans for something like travelling, it might not happen for a few years because of what else is going on in their life.

Also, sometimes it's things like charity that clients are thinking of because they have very strong values that influence their decisions. I met with a client recently, who is looking to leave a lot of their wealth to charity because of causes that are close to their heart.

More generally, it's important for clients to feel like they're making good decisions and to feel financially secure; to give them peace of mind. They want someone who can confirm that they’re making the right decisions.

Is that key on the investment management side too, Harry? Are there other threads you can highlight from your conversations?

HS: Yes, because we forget life is hectic: jobs, family, kids, and more. Often personal finance can be neglected somewhat. So, when the time is right for you and you have the opportunity, engage with a financial planner or investment managers. We’re not as scary as we seem and will try to work around you.

But from my perspective, in terms of what I'm hearing people talk about, it’s the cost of living and the cost of care. I think there have been a lot of stats in the press recently, especially on the cost of care, and it can seem quite daunting for clients when they can’t predict if, or when, they will need it.

Further to this, we’ve seen periods of high inflation over the last two years. It’s now coming down, but the memory of high inflation will still be in the back of your mind, and you’ll be thinking ‘do I have enough money for me and my family?’

Do you have more comments on that, from a financial planning side, Hazel?

HB: Yes. One of the things on the financial planning side we look at is lifetime cash flow forecasting - which does exactly what it says on the tin. What we do is incorporate some of these things into the conversation because care and the cost of care will be on their mind.

But some younger people are not thinking about the fact they might need money for that in the future. So, one of the skills of a financial planner is to guide clients through a conversation on their lifecycle: i.e. this is where you are now; this is where you could be five, 10 and 20 years down the line and so on. And when thinking that far ahead we can start to ask them, would you want to go into a care home if that was necessary? Or would you rather try and have care in your home? What could be the financial implications of those preferences? We build that into a cash flow forecast. But we also stress the importance of enjoying your wealth to clients.

This is the first part of a series of conversations with Hazel Bowen and Harry Schofield on the accessibility of financial planning and how to talk to professionals about your money. The series aims to provide both a financial planning and investment management perspective.

If you’re interested in discussing any topics in this article, or others in the series, please do not hesitate to get in touch. We promise we are friendly, open, and honest, no matter what your objective or vision.

You may also be interested in:

• How we talk about money: part two
• How we talk about money: part three
• Investment Outlook for May 2024

Investment involves risk. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested. The information provided is not to be treated as specific advice. It has no regard for the specific investment objectives, financial situation or needs of any specific person or entity. The tax treatment of all investments depends upon individual circumstances and the levels and basis of taxation may change in the future. Investors should discuss their financial arrangements with their own tax adviser before investing.

1 Housel, Morgan. ‘The Psychology of Money: Timeless Lessons On Wealth, Greed, and Happiness’. Harriman House (2020). P. 5.

2 Hundreds of thousands of young people leaving school every year without money skills | Money and Pensions Service (maps.org.uk)

3 Financial Lives January 2023: Consumer experience of the rising cost of living – the burden of bills and ways to get support | FCA