For years, people have used the terms ‘financial planner’ and ‘financial adviser’ interchangeably. Clients – quite understandably – assume that advisers and planners do the same thing; namely give you advice on what to do with your money.
These days, the gap between what a financial adviser and a financial planner will do for you has never been wider. As you might have guessed from our business name, we’re a firm believer in high-quality financial planning.
So, what’s the difference?
Financial planners are interested in you, not your money
The first important point to note is that ‘financial adviser’ and ‘financial planner’ are terms. Any firm can call themselves a ‘planner’ and so its not the name that’s important, but what they do for you.
If you’ve worked with a financial adviser for a while, you’ll probably recognise this scenario.
It’s likely that you initially approached them with a specific problem you had to solve. Maybe you’d inherited some money, realised you needed to save into a pension, or you wanted to ensure you had the right life or illness protection for your family.
Your adviser probably asked you a few questions, went away and did some research, and came back to you with a recommendation. They sold you a product, you signed on the dotted line, and off you went.
You probably get an annual statement showing how your pension, ISA, or investment is doing. If you’re lucky, you might even get a call to have a chat about how things are going.
Sound familiar? This is how our profession worked for years. It’s how many of my peers continue to work.
We, and other true financial planners, do things a bit differently. It might sound odd, but we’re less interested in your money than we are in you. It’s not so much what you should do with your money, but why.
Rather than asking you about your tolerance for risk, and focusing on the numbers, we’ll ask you some questions you probably didn’t expect from a financial professional:
• What do you want to do with your retirement? What will make it special?
• What’s on your bucket list?
• What does the perfect retirement look like?
• What do you want to do with your life?
• Is there anyone you’d like to help financially (for example, a child)? If so, how?
• What concerns do you have about the future?
Unless we know what your plans, goals, ambitions, and aspirations are, there’s no way we can advise you what to do with your money.
It’s like trying to complete a jigsaw puzzle without seeing the picture on the box. Things just don’t fit together easily without seeing the full picture first.
Showing you in black and white what your future looks like
One of the ways we work with you to help you live the life you want is through cashflow forecasting.
No, come back!
It might sound like something an accountant would do at the tax year end, but cashflow modelling is the engine that powers great financial planning. It enables us to look at your present and future commitments, income, expenditure, and wealth. We can make assumptions about taxes and growth, and even factor in volatile market conditions. We can even model a wide range of possible outcomes.
Once the inputs are complete, the results are there in graphical form for you to see. You will be able to see in black and white that you have enough savings to retire. You can know for sure that you can afford the round the world trip you’ve been planning for years. And, you will have the confidence to gift money to your children, safe in the knowledge that you can maintain your desired lifestyle.
Conversely, if things look a bit tight, or you aren’t demonstrating the right behaviours that will enable you to live the life you want in the future, we can put plans in place to get you to where you need to be.
Financial planning empowers you to make life-changing decisions. It’s not about us telling you what to do. It’s a partnership, where we help you to understand your position and what you need to do (or not do!).
You wouldn’t believe the number of clients that I have sat in front of and showed that, even with some pessimistic assumptions, they could retire right now. They have walked away from our meeting knowing that they have enough to live their dream life for as long as it lasts.
The 3 objectives we want you to meet
I believe it’s our duty to help you meet these three main objectives:
1. To feel secure, safe in the knowledge you will be OK. The only thing we ‘sell’ is ‘peace of mind’.
2. To improve your life through wise money choices.
3. To enjoy your life, have plenty to look forward to, and to understand how this is possible.
We’re here to take your jumbled pile of jigsaw pieces, establish what the picture is supposed to look like, and help you to put them together.
Get in touch
If you’re currently working with an old-school financial adviser, speak to us to find out how financial planning could add huge value.
If you’ve never worked with a planner or adviser before, get in touch to discover the genuinely life-changing benefits of quality financial planning.
Contact us today or call 01372 404417.
