The term ‘financial planning’ has been too loosely used to the extent of it often being misused and adulterated. There are many people out there in the marketplace claiming themselves as a planner and providing financial planning services.
Unfortunately, the public will eventually discover that these ‘financial planners’ are aggressively pushing products where the size of the planners’ commissions come before the interests of their clients. As such, these so-called financial planners are unable to clearly differentiate themselves from product pushers because they are product pushers themselves!
Truth be told, the general public is getting turned off by manipulative approaches employed by people who hold themselves out as financial planners but do not practice true financial planning processes and hence, do not add value. As they say, one bad apple spoils the bunch; when the man on the street encounters another financial planner, they would think— “they are all the same”. After all like they say – Once bitten twice shy.
This is clearly not only confusing the public but also damaging the reputation of certified and licensed financial planners. As a result, the public is smarter now and generally quite wary of people who call themselves financial planners.
Although there is undeniably a growing trend of people wanting to do financial planning, finding a genuine financial planner has been a frustration for many.
Financial planning is a process continuous engagement with a client to do what is right and necessary to advance his/her interests and enable him/her to increase the likelihood of achieving his/her life goals through proper management of his/her personal financial affairs.
It is about focusing solely on the client’s interest because nothing turns off a client more than the feeling that a so-called financial planner is more interested in making that fat commissions from the product that he/she is trying to push.
As such. the approach of a true financial planner to conduct financial planning is significantly different from the way a typical salesperson (or commonly known as “product peddler” in financial planning lingo) would use in a selling product.
In a nutshell, a true financial planning experience is a solution-focused and relationship-centered consultancy service. Any financial products, where necessary, only comes at the end during the implementation stage.
I can use 2 analogies on how a true financial planning experience can benefit a client.
1. The Architect
Imagine you are undertaking a 10-year mega home construction project, think of having to manage civil engineers, mechanical engineers, contractors, interior designers, etc. on top of your full-time job or business. You need to ensure everything and everyone is coordinated- so that the end result is what you envisioned.
TEDIOUS? We think so too. Now, imagine the pivotal role of an architect who fully understands what you need to manage your home construction project.
A true financial planner is the Architect of your personal Finances- making sure it meets your desired outcome and your personal finance is, in fact, a Dynamic Long Term Mega Project.
2. The Doctor
Imagine waking up one day and feeling a prolonged uneasiness in your chest. Do you prescribe your own medication? Or does it feel right if a medical professional dispenses medication without proper consultation and diagnosis?
NOPE? I think so too. Getting the wrong or unnecessary medicine not only worsens your condition but can possibly endanger your life.
Doctors charge for diagnosis (consultation) and only dispense suitable medication (solutions) as required. They are billed separately. It should be that way for your best interest as a patient.
The Internal Value and Belief of a Financial Planner
You can judge this by their behavior, demeanor, and actions.
See what their values and personal beliefs are. Ask questions :
“Why are you doing, what you are doing.”
Every great person or organisation has clarity in their “Whys’, taking a cue from, Simon Sinek’s The Golden Circle. The crux of The Golden Circle is – All organizations or people know what they do how they do it, but very few people are able to articulate WHY they do, what they are doing. To put it quite simply, failure to answer this question indicates a lack of clarity of purpose on why he/she is in the industry in the first place.
The reason why so many people came into the financial planning industry and then silently drop off is because they think they can make millions. This is definitely not the right mindset to begin with. It’s like being a doctor – ask a doctor if he/she is in the profession wanting to serve or wanting to earn good money?
A true financial planner is serious about what he/she does. This is definitely not a part time job so being a part time insurance or unit trust agent just does not cut it. Back to the Golden Circle principle. if your “WHY” is to make some extra money on a part time basis, do you think this is fair to the client?
So look at all types of financial agents around you and ponder over the above. Here’s a tip – be wary of financial agents who adopt the flashy and ostentatious agency culture that involves big houses, flashy cars, expensive watches, and so on. Ask yourself if their values are aligned with yours. Remember that any financial agents who can afford the lifestyle of “spend big and fast” can do so via the very commission you paid them.
Don’t you think it is contradictory when this type of financial agents preach the importance of saving, investing, and protecting your assets, yet they practise the exact opposite?
It’s always been my belief that financial planning is all about making a difference and touching lives.