Price is one dimensional while Value is multi-dimensional
Posted by siteadmin on Wednesday 10th May 2017.
'They know the price of everything and the value of nothing' so said Oscar Wilde in 1892 in his book Lady Windermere’s Fan.
Now I’m not going to have claimed to have read the book but his sentiments ring true today, especially in the financial planning world.
The Financial Conduct Authority which regulates the financial services industry is looking to determine the value for money customers are receiving across various aspects. It’s the industry’s hottest topic at the moment.
And I believe that it’s a very subjective topic which I was discussing with a friend recently. He used a good example, unrelated to financial planning but with parallels about what he saw as a service providing real value for money.
He was having computer problems and had gone through three different service providers without much success. At his wit’s end, he called in a chap who was more expensive than the previous companies.
To cut a long story short, the more ‘expensive’ company sorted out all his technological issues. He was advised on the best way forward and the advice he received saved him spending hundreds on a computer he didn’t actually need.
So rather than being the ‘expensive’ choice, the engineer turned out to be fantastic value for money.
What was clear from this story was that my friend was listened to. His issues and needs were clearly understood and the engineer who helped him obviously knew his stuff.
Another example is when I moved into my current Office three years ago. I needed to kit it out, but everything available from the mainstream retailers was rubbish.
I knew someone who ran an Office furniture business. But when I looked at their website, it looked so plush and upmarket, I thought it would be ridiculously expensive.
Being frustrated in not being able to find what I was looking for, I made the call just to see. Was I glad I did as it wasn't what I thought. Unlike the mainstream, they literally custom made and what I paid was pretty much what I was expecting. As a result, I knew a) it was what I wanted and b) it would last.
If I didn't give them a plug I'd get shot. So if you have a need or know someone that does click here.
The parallels between these two stories and good financial planning are very similar.
The key for a financial planner is to listen and understand their clients’ needs. Based on that solid foundation they can provide the advice and guidance which sets the client on the right path.
And there’s a lot of value in getting these kind of very important decisions right.
I’ve seen it many, many times where people have tried to do everything themselves and it ends up costing them more when they need to call in help to unravel or organise the chaos which is often created.
Lot's of people value being listened to, understood, reassured and having an open honest relationship with their financial planner. Others only want to know how much it'll cost regardless of what they are going to get and don't see the value.
There is a difference between price and value. Price is one dimensional while value is multi-dimensional.
Oscar Wilde’s words were certainly wise.