The job titles of Financial Adviser and Financial Planner are often thought to be one and the same. Often when I meet new people, they ask what I do. When I explain that I’m a Financial Planner, they might comment “Oh, I work with someone like you: so-and-so at firm name”. But, when I go on to ask them what that person does for them, I’m afraid that they are certainly not receiving a financial planning service.
So what’s the difference?
In simple terms, advice is generally more transactional by nature. You buy a property and need mortgage advice. You’ve got some spare income and feel you ought to be saving for the future. You inherit a lump of money and want to invest it. Or, you come to retirement and need to start income from your pensions.
Working with a financial planner is a much more detailed and ongoing process. A financial planner will firstly help a client in defining their goals and objectives, a clear plan of what life will look like, for themselves and for their families. They then obtain full and detailed information regarding the client’s current financial position. How do these existing plans fit with the client’s objectives?
Next steps will be:
- creation of a comprehensive financial plan
- a clear strategy
- an action plan of what needs to happen, both now and in the future
This planning helps that person achieve their long-term goals. It makes sure they have money invested in the right places, at the right risk level, and available to them at the time they need it. We include detailed modelling to visually demonstrate the impact of a client’s decision making – it really does bring it to life! And, finally, the plan is regularly reviewed to make sure that it remains on track to achieve the client’s objectives. We make sure to capture any changes in their goals, taxation, regulation or legislation.
Anything else I should know?
You will find financial planners, like me, often hold an additional qualification of Certified Financial Planner. This is a globally recognised qualification for financial planning. Other qualifications demonstrate technical knowledge, but this qualification really tests the application of that knowledge to real life planning scenarios.
We take the time to get to know our clients. Only by understanding your objectives for yourself, your family and the wider community can we ensure that your financial planning is structured efficiently to achieve your goals.
We have recently taken on a new client who has experienced this difference first hand. His comments were music to our ears! He was approaching retirement and looking for the first time for professional support with his finances. His words, not ours: “having spoken with a financial adviser who just tried to sell a product, I now understand why I need a financial planner”. Hurrah – a result for financial planning!
If you would like to know more about how we work and feel Financial Planning is the right approach for you, let’s talk about it.