The Magic ISA Pot…
A young, recently FPC qualified adviser knocked on a door promptly for his appointment, he knew the prospect, as they had been school pals.
He entered the drab northern lounge, which smelled faintly of stale smoke. The clients, a young married couple with baby were living with his father who, being a widower had welcomed their company.
Alas, it was the lounge that had caused a family argument, the client’s father smoked and had been indulging in the house. Ok he left the lounge window open and he only ever did it late at night after the family were all in bed but it wasn’t good enough, not with a baby in the house.
Our recently FPC qualified young hero started off the conversation with a sublime, positioning question…
“So, what do you want to know?”
Well the clients wanted to know how they could get their own place and fast! After living in a council house for a year they had returned to begin saving for a place of their own, they knew the housing market would soon leave them for dust.
Our hero had only Two funds, the clients plumped for the under performing European Growth Fund, this would give more units for their money and when it went up they would do well, but how much should they put in?
Cash was short for the 21 and 19-year-old family, he had a job selling to factory managers, she was at university. The adviser suggested £50 per month.
£50 per month? That was a lot of money to a young family, roughly translated from fiat money into the more accepted young adult currency of ”beer tokens” it meant the couples only night out per week would be going straight into this pot.
Of course, the couple had some objections; then with his second even more enlightened question, our hero quickly helped them clarify their thoughts “does it smell of smoke in here?”.
Instantly, the couple sub-consciously came to the right decision, and just then the magic savings pot was sold.
The months rolled by and the magic pot grew, 22 months later and the family had their own house. Maybe it was a twist of fate or maybe just a busy schedule but the clients forgot to cancel the Direct Debit and the magic pot kept going in the background, as did our hero.
Later, the family needed a new car for the wife to get around but could they afford it? What if things went wrong?
They turned to the magic pot and it filled them with confidence. Even if the worse happened they could handle a few months car re-payments.
Of course the worse didn’t happen and the magic pot grew.
Later, the family needed a larger house for 2 kids, one with a garden for football would be great!
But what if interest rates rose, what if the bonuses stopped? The dotcom bubble had burst, what did it mean?
Again they turned to the magic pot and it filled them with confidence. It would make up the bonuses if needed. The pot wasn’t needed and it grew.
The client wanted to set up his own business, but how to pay the mortgage? What about the capital? What about the risk? Goodness what about the kids?
They turned to the magic confidence pot and took heart, even if it all went belly up, it could cover them for 6 months whilst he got a new job.
Wise leaders of men know that the magic of saving uproots fear and self-doubt, replacing it with faith and confidence.
Of course this was all thanks to our young adviser, his fervent belief in his product and his invaluable questioning ability.
“In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.” Confuscious – 500 BC
How much did it matter that back then Gav only had 2 funds to sell?
Advisers, you will love or loathe the RDR but who will be ensuring that this generation of young families own magic confidence pots?
If savings are important (and they are), why are we replacing UK advisers with a useless Internet based quango, which makes no contribution at all?
The reason could be below, but only whisper it unless the public hear it….
Maybe its because when advisers don’t sell any products it leaves the public’s money in the rotten banks for the nations favourite fat cats to gamble and speculate with?
We need a judicial review on the RDR, the industry should also begin a campaign for hearts and minds of the public too.
Any thoughts please share…