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WHY SUCCESSFUL WEALTH MANAGEMENT is like the Tour de France

WHY SUCCESSFUL WEALTH MANAGEMENT is like the Tour de France

OK, I admit it, I love the Tour de France (TdF) and, for the first time ever, I will see it, or at least experience it, live – just in Cambridge, rather than France though! I am volunteering as a Tour Maker, and cannot wait. Yes, to some it is “just” men on bikes, and yet when one knows what they go through to even finish, let alone win, it must come close to being the toughest sporting challenge there is. Then add in the tradition, the chance of immortality and the mental strength needed to compete.

It is not in respect of the pain barrier or immortality that I will compare successful Wealth Management to “Le Tour”. Rather, I see seven themes that appear in both. They are, in no particular order:
  • The need to integrate skills/factors – no single strength wins in either discipline
  • It is at least as much about the team as the individual
  • It is best to start young (or soon anyway)
  • Great care is needed, even when the road ahead looks clear
  • Accidents happen
  • Don’t (always) believe the hype
  • Yes, do it for “me”; also do it for the people in our life we care about
  • We don’t have to go to France to find it!
Now, if you will forgive me the last (and eighth, for those that were counting), the other seven seem pretty straightforward analogies, as follows:

The overall winner must be part sprinter, part climber, have amazing endurance and know enough about other areas of the race to avoid a horrendous final day. Similarly, successful Wealth Management is the integration of financial planning and asset management. One without the other is never likely to work nearly as well, so we must make sure we treat our financial affairs to both.

Without back up, no one, however talented, can complete the TdF. let alone win it. Likewise, Wealth Management, done successfully, is delivered by a team, perhaps led (like a TdF team) by the most experienced or “quickest”, and backed up by talented people in their own right. This can be taken even further, when one considers the team that the person requiring Wealth Management has to incorporate – their partner, children, parents, work colleagues etc. can all have a big part to play, as indeed do lawyers, accountants and other professionals.

Of course, for the Tour, starting young is pretty much a prerequisite. No 60 year old will ever win it, and definitely not at the first attempt! When it comes to personal finance, many elements really need to be started young; others can wait – just don’t leave them too long! Like cycling generally, the sooner we learn, the sooner we can enjoy what follows. One of the fundamentals of Wealth Management is helping children to learn the value of money; this might seem a wish rather than an important objective, yet there is plenty of evidence to show that learning about (and practising) budgeting at a young age, with a concept of the value of money, really pays off. Starting a pension or other savings early means more in the pot when we need it.

In the TdF, the road ahead can indeed look clear. However, a wheel a few inches out of place, a slippery stretch of road or sharper than expected corner, and the race can be over, or at least one’s ambitions dented for a year or perhaps even a lifetime. Successful Wealth Management is also about remaining vigilant, perhaps particularly when everything seems just fine. A TdF team will have communication sent regularly to its riders, ensuring they know what conditions to expect and what is around the next corner (ormight be). It is helpful for us if our financial futures are considered from a look at the road ahead rather than what lies behind us!

Regardless of this vigilance, accidents happen. The TdF rider has a support team consisting of both medics and trained mechanics to fit new parts at high speed, keeping the show (and their chances) on the road. All too often, the Wealth Management equivalents get forgotten - sensible protection in place for when things do go wrong – for example; life assurance, cover if we suffer a long-term or critical illness and provision in our portfolios to help protect from the ravages of recession or unexpected events. As in the Tour, some elements are more important at different stages of the “race”, and the best preparation is simply to be prepared, not to chance to luck.

The TdF has the makings of a block-buster novel every year even before the race has started. By the finish, there are more twists and turns than the average rollercoaster. It also has a long history of problems, and the ethics and integrity of many have come into question. Yes, some is hype, and we need to avoid that “noise” just as much in our financial planning and asset management as we do when we turn on the TV for an hour watching this beast of a race. However, sometimes what appears unlikely or hyperbolic turns out to be only too true and real, and help from a trusted adviser, who already knows us and understands our needs can really help. Ethics and integrity stand the test of time.

Finally, despite the Tour being a team event, it is the individual that receives the focus, and the individual that is ultimately responsible for bringing the bike home. However, making sure that everyone will be fine even when we are not, that there will be a legacy left and that our name will be remembered for the right reasons, these resonate with both our Wealth Management needs and the Tour. We have a responsibility to those around us – our personal “team”. Successful Wealth Management – it’s just like the world’s greatest race.

By Simon Gibson, Director