- February 23, 2019
- Bob Quinn
- Financial Planning
I have the distinct impression that GPs wait for us to tell them what’s wrong, and then they prescribe medicine based on our (usually) uninformed and sometimes highly fanciful diagnoses.
It’s a bizarre situation. They have gone through years of rigorous training and yet they take the word of a lay person. Is it laziness? Is it apathy? Does it come from a belief in the placebo effect?
Of course, it’s important to ask the patient what the symptoms are, but surely the doctor must then ask some searching questions to narrow down a likely cause of the illness or condition. Sometimes further tests will be necessary.
The similarity with some financial advisers struck me a while back when I received a follow up call from a man who had made contact with me previously about a investing a sum of money. We had had a chat but I am based a good distance away from where he was and he eventually decided to find an adviser closer to him.
But having received the investment recommendation, he was back on to me. There was something about it that didn’t feel right.
Diagnose first, prescribe next
We went through the elements of the proposal and they were not what I would have proposed for a number of reasons that I won’t go into now. But what was really shocking about this engagement was that the adviser did not know that this man had an adult dependent on him and his wife for his whole life. The investment proposal, needless to say, did not make any provision for the daughter.
The man admitted he didn’t tell the adviser about his daughter. He had just said “I have money to invest”, so the adviser prescribed his ‘medicine’ based solely on his diagnosis of his own problem.
It turned out that it was not that simple. Even a basic exploration of his circumstances would have revealed that it was not about investing a sum of money in isolation. It was about coming up with a broader proposal to take account of his family circumstances.
The man had engaged this adviser on a no-fee basis. He didn’t need to charge a fee because he would have earned an initial commission from his investment. Factor in this initial commission at the outset and you are losing out on a chunk of potential growth.
Terms and conditions apply
The second example that springs to mind is with an existing client of mine. For a number of reasons, she had decided that she wanted to consolidate her various pensions, with convenience being top of the pile.
She contributes to a PRSA (yellow pack pension, for want of a better description) in her current employment and she also has two ‘paid-up’ pensions from previous employment. She was getting three sets of paperwork twice a year and it was agitating her. I advised her to move her pension funds into her PRSA. To do this, she had to go to her PRSA adviser. He suggested she take out a PRB (Personal Retirement Bond). His reasons for suggesting this were that she could start drawing down the benefits from the age of 50 and that it would allow her to invest more aggressively.
The woman couldn’t understand why he was suggesting a PRB – it didn’t seem to be the solution she was looking for and the features were not what she needed. In her mid-40s, she is happily working and not thinking of retiring in the next five or so years. Her circumstances would not suggest that she would need or want to start drawing on her pension from the age of 50.
She ran his proposal by me, wondering if we had missed anything.
It didn’t take me long to figure out why the adviser had suggested this product; he would earn c. €2,500 from the transaction, but very little if the fund was transferred to her PRSA. This lady was not getting advice from this guy; she was being brought through his sales process.
In GP terms, the adviser had written out the prescription without even listening to her symptoms.
So, imagine you leave your GPs surgery after the consultation. She has given you a prescription for some drug or other. You go to pay Liz in reception and she says “Oh no, there’s no fee. We receive a commission from the pharmaceutical company”.
I’m almost certain you’d look for a new GP.
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