30 Years

By Derek Dryden

I wanted to share one of my most valuable learnings in the hope that it will be useful to you. My journey as a financial adviser started in London (October 1990): it was a tough education but one that 30 years later, still helps me on a daily basis. There is something I have absorbed over this time, that has served me well, and like all good habits, it is a simple lesson to apply and one that adds significant value to clients who have assets connected to the stockmarket.

One of the great things about experience, is that it provides you (and subsequently your clients) with a sense of calm: especially when things in the investment world are not going as smoothly as one might like and all you want to do is behave like an irrational human being…..when in fact what you need to do, is ignore those negative voices in your head, disturbing your sleep… although I accept this is easier said than done for many.

Of course we currently have the global pandemic to work through but there have been many other events that have created plenty of stock market volatility and uncertainty for investors to fret about over the last 30 years: the 2 big examples are the Tech Bubble bursting and the global financial crisis.

The one thing these events have in common is that they brought fear and anxiety to clients, who naturally wondered at the time, when this pain of watching their valuations plummet might stop – some even questioning IF it will stop?

The benefit of know-how is that it helps you provide valuable perspective, and this is where I believe good advisers are worth their weight in gold.

Clients these days have access to more information than they’ve ever had before: we all know that when the world goes a little crazy, the media generally seem to almost revel in the chaos, often adding fuel to the flames, instead of providing soothing words of comfort to those most affected. Using the example of the global stock markets, it never ceases to amaze me that when they are on a dramatic downward trajectory, the gloomy numbers make the news headlines on a daily basis, but when they recover (and exceed their previous position), you might struggle to find one mention of this positive journey.

Who knows what (or when) the next negative event that spooks markets to over react in a dramatic fashion will occur, but one thing we do know, is that when it does happen (that’s when NOT if) good fund managers will be rubbing their hands together at the prospect of yet another glut of “buying opportunities”… they always do.

We have seen so much pain and suffering, anger and loss during 2020 and whilst we might not be out of the woods yet, I believe the one area where financial advisers can add peace of mind is to actively educate their investment clients to stop thinking like human beings and think like fund managers.

When I look back over my career to date, the element that has brought me the greatest pleasure has been when I have demystified the connection between risk, market volatility and the impact of these things on investment valuations and a client’s “game plan”, witnessing the light bulb moments when clients understand these things.

Put quite simply, for me, the most valued lesson I have acquired over my 30 years of advising is basically having the ability to look past the noise of screaming headlines, listen closely to the people at the sharp end and ensuring you communicate with your clients regularly, sharing your knowledge and experience, thus helping them sleep better at night.

The content of this blog is for general information only and should not be considered advice. Professional advice relating to your individual circumstances should always be sought prior to making any decisions or taking any action. Your capital is at risk. The value of investments can go down as well as up in value and you may get back less than you invested. All details were correct at the time of writing.

Reference – BL115 – Dec – 2020