The Paradox of Value
What is the paradox of value? Simply put, this is the apparent contradiction that although water is on the whole more useful, in terms of survival, than diamonds, diamonds command a higher price.
In thinking about this, whilst it may seem to be the case that this is true, what would be more valuable to someone dying of thirst in the desert?
The question of value therefore, really comes down to the eye of the beholder in determining how valuable something is to you – it is subjective. One person may value something much higher than the other depending on their perspective.
The paradox above got me thinking how this applies in terms of financial planning and the value that people get from working with a financial planner. Undoubtedly, people value the services provided by a financial planner differently.
As a financial planner I am obviously biased when it comes to the value of advice and more importantly the advice relationship. I can see the positive impacts we have on the people we work with and their lives.
Many surveys have shown over the years what clients value from their adviser. Surprisingly, the tangible nature of the advice relationship, such as how investments are performing or how many meetings they had with their adviser, rated much lower compared to the intangibles, such as the peace of mind, feeling in control, being less stressed, feeling better prepared for the future and having a higher degree of confidence that you can achieve your goals.
Advisers continue to grapple with how they demonstrate the value of their advice though. Without question, in our mind, it is the positive and intangible nature of advice that outweighs the quantitative factors. That’s not to say the quality of the advice and the service offering are not important – they most certainly are – though these are a ticket to the game for any professional services advice business. It is how a firm engages with its clients and demonstrates that it really cares that will set the advice business of the future apart from the robots.
As the Cree Indians say “When the last tree is cut down, the last fish eaten and the last stream poisoned, you will realise that you cannot eat money”.
At Eqeus, our business has been built on relationships – The EQ in our name shows the strong belief we have in this being one of the most important parts of how we add value to our clients lives. To learn more just contact the Eqeus team today.