Maybe up to 10% of our value derives from our knowledge of financial products, investments and tax matters.
At least 90% of our value derives from doing everything possible to help you behave in the way that best suits your long-term goals / objectives / dreams – in short, to stop you blowing yourself up.
There are many ways to misbehave. The most destructive is to sell your investments as the stockmarket crashes. This happens a lot.
In fact, stockmarkets can only crash because humans are doing just that. Stockmarket crashes are caused by humans, not viruses, terrorism or anything else.
The “Covid Crash” started about 14 February 2020 and lasted until around 20 March 2020. If you were a TCFP client, the value of your investments dropped about 19% over those five weeks.
As the crash unfolded, we advised you to stick with your investment strategies – nothing was broken, your plan was still on track.
As it continued, we twice recommended selling bonds and buying equities. All but two of you did. We then sold back some equities and bought bonds. We did this twice too. You all (bar the two who had left us) followed our advice.
Your behaviour was impeccable, but how was it rewarded?
Let’s compare three scenarios:
- Good client – did as recommended (based on actual client figures).
- Panicky client – held on to their portfolio for the first month of the crash, then sold all their equities and bought government bonds.
- Well-timed client – sold all their equities the day before the crash started and bought government bonds.
Both the panicky and well-timed clients are still in government bonds waiting for things to “settle down”. They continue to prefer the less dramatic bonds. The evidence confirms that millions of investors are doing exactly this.
The difference in outcomes is quite startling. After 90 weeks the good client has 67% more than the panicky client and 28% more than the well-timed client.
In monetary terms, this table shows what portfolios valued at £500,000, £1m and £1.5m just before the crash would now be worth:
| £500,000 | £1,000,000 | £1,500,000 | |
| Good client | 632,661 | 1,265,321 | 1,897,982 |
| Panicky client | 378,704 | 757,407 | 1,136,111 |
| Well-timed client | 492,000 | 984,000 | 1,476,000 |
So, a client who had £500,000 on 14 February 2020 and did everything we recommended would now have £632,661. If they did not, and behaved like millions of others did, they would likely have much, much less.
The differences in outcome are life-changing. The fees we charge are not.
If fact, since the start of the Covid crash, we have likely earned all the fees you will ever pay us, many times over.