It just a switch, a little switch. But used incorrectly it can destroy the relationship you have so arduously built up with your customer. 

The switch we are referring to is the process of moving investments between different unit trusts or investment linked policies (ILPs) without the payment of an entry fee (front end sales change). Most ILPs offer unlimited free switches and two transactions happen – selling of one investment and buying of another.

Many financial advisors believe that when the customer’s investments are suffering losses the best thing, they can do is switch them into something better. But the question is, if we knew what is better why didn’t we apply that knowledge of better for the previous investment. And also, how do we know that this new investment will also not go down. How do we know that some negative event (war, pandemic, financial crisis) is not around the corner.

More importantly when you switch, you are converting paper losses into real losses. How can your customer be happy when they have lost money.

In place of switching out of a fund whose NAV is lower than it was at the start of the investment we recommend topping it up.  In our UT/ILP Investment Sales Master Class we will show you, with evidence what happens to an investment which goes through a downturn and what are the benefits of adding more to a portfolio which is suffering losses.

To learn more about our approach to investing drop me a message on 92335481.