One of the biggest lessons Greg Neall has learnt in his career as a chartered financial planner is to trust his own instincts.
Speaking to FTAdviser as part of our Coffee Corner series, Neall, of Wake up your Wealth, said asset allocation was the one thing that no one will help you with and the area you probably require the most help.
What are some of the areas you would’ve liked help on in the early stages of starting in this career?
“Nowadays if you're in a network or larger firm, they'll do it for you,” he said. “But when I started, I can remember phoning up the compliance team and saying, well, I know lots about pensions but I don't really know much about investing money.
“How do I know which funds to use? And they said, well, if the client comes out with a balance on the questionnaire, give them a fund that says they are balanced and should be alright.”
Neall said that was the only advice that he got and the idea of what asset allocation you are doing, what geographical exposure, sector exposure, and the ideas of volatility and liquidity and things like that were just not taught.
“I probably learned them in the exam texts, but no one really taught me how to use them,” he said.
But are there any lessons you learnt early on that are with you today?
“How to override what your client expresses for fear of poor behaviour,” he said.
Neall gave an example from 2009 when he was in a network - around the time of the stock and bond market crash of the financial crisis - when his network decided that they were going to make attitude to risk questionnaires mandatory for every annual review.
“This, in fact, was to this day, not a regulatory requirement,” he said.
“They decided they were going to impose this so I started sending out getting these questionnaires back and surprise after a massive market crash every one of them almost came back, more cautious than the client was currently invested.”
He explained that naively, he did as I was told and followed the network mantra and moved a lot of people from maybe 60 or even 70 per cent equity portfolios to 40 per cent equity portfolios when stock market prices were rock bottom.
“Those portfolios never recovered,” he said.
“You can do as many exams as you want - I'm a fellow of the PFS - but none of those books tell you that if your client wants to turn down their risk after a market crash you don't do it.Or you at least tried to talk them out of it. But no one told me that I learned that the hard way.
“I lost people's money and I still rue it to this day.”
In addition to this, Neall explained that while this is probably true of almost every industry, something he learnt was to trust himself.
“You realise that the people at the top of the tree don't understand how you do the job,” he said.
