Patience was long considered a virtue, but it seems more like an anachronism today as the demand for instant results seeps into every corner of our lives.
We’ve come to expect things so quickly that researchers found people can’t wait more than a few seconds for a video to load. UMass Amherst examined the viewing habits of 6.7 million internet users in a study released last year. How long were subjects willing to wait? Two seconds.
After that they started abandoning. After five seconds, the abandonment rate is 25%. When you get to 10 seconds, half are gone. Tolerance for delay is in short supply.
But that’s good news for tax planning. Or should be. But despite Government censure, public uproar and media attention (to both corporate and personal tax avoidance) three quarter of advisers say that tax mitigation has not become any more important over the last 12 months. The vast majority of advisers (76%) expect to see no change in the extent to which tax minimisation plays a part of their overall business mix going forward.
This feels like a missed opportunity.
Our consumer research shows clearly that value in the eyes of advised clients comes from the confidence that the advice proposition will deliver long term life goals. Without the systematic integration of robust tax planning into that proposition, though, the very things that consumers aspire to are far less likely to happen. Where investment management operates in a vacuum key questions are missed. Things like:
- Personal taxation: now and in the future
- The importance of access to capital and when
- Extent to which tax efficiencies have been used: notably ISA / Pensions
- Estate planning aspirations
- Plans for future residence / domicile
Without these questions shaping planning, it’s hard to conceive the right decisions, in relation to the appropriate solutions and structures, being made.
Unlike projected (hoped for) investment returns, the benefits from tax planning are a known quantity. As such it’s an area where clients can clearly see the value of the expertise they are paying for.
The need for instant gratification is not new, but our expectation of ‘instant’ has become faster. With tax optimisation, advisers don’t have to wait for the future to tangibly demonstrate the value they are adding. It’s instant and it’s certain, and that’s a rare thing
Q: What is it that you value most about your financial adviser?
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