The need for advice has
never been greater It feels recently as if there is an accelerating pace of change and many constants we have had in the past – pensions, trusts, tax are changing dramatically with a new Conservative government and, dare I say, assertion of political philosophy.
Almost everyone worries about money, what the future may hold, and the decisions and choices that they will face along the way and people are looking for someone to make sense out of this complexity.
For those that work with us the benefits of good advice are often received in the far-off future. It is often easy to appreciate the value received in the first year, and easy to forget to appreciate the value on an ongoing basis. The financial planning relationship can be broken down into three key phases of value.
Sorting out the mess and building the plan
New clients often arrive with a proverbial suitcase of bits and pieces collected over the years, such as a number of pension plans, with- profits bonds, endowment policies, life insurance and a stock broker or IFA managed portfolio. This collection of ‘stuff’ often has little structure and rarely provides comfort that the future will be bright. That’s a stressful place to be.
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The first and most vital step is to help clients to set out their vision for the future, both in terms of lifestyle goals and the money needed to fund them. Next comes the analytical work, which may involve using cash flow modelling tools, to help empower clients to make sensible strategic choices.
The resulting ‘plan for the future’ becomes a joint effort between client and planner. Once sorted and implemented, the client is then back in control of their future and their finances. The value is easy to see.
Progressing the plan
Financial planning is not a ‘set-and- forget’ process, far from it, in fact. Regular review meetings help to provide clients with an insight into how things are going relative to the plan. What is more important is the future and how the plan needs to progress from this point forward. Some issues and consequent decisions faced may relate to events in the client’s life, or may be more technical or market issues that sit in the financial planner’s bailiwick. Clients have better things to be doing with their time than trying to understand and tackle these issues alone!
Some years may be quite uneventful, while others are momentous. In the former, not much may appear to happen, but that does not diminish the value of the financial planner, who is – behind the scenes – constantly on the lookout for issue that may threaten the successful outcome of the plan, or ways in which it can be refined. At times of crisis, understanding the issues faced, finding a solution that makes sense, facilitating decisions that need to be
made and having the fortitude to execute under pressure, is where great financial planners come into their own.
Long life, death and immortality!
There are also some more subtle areas of the value of a long-term relationship with a trusted financial planner. For many people, living longer is a two-edged sword.
On the upside, we can all now expect to live materially longer than our grandparents’ generation. On the downside, we also know that with longevity comes attendant health and financial challenges. For example, long-term health care costs are rising rapidly and simply knowing that they can be met is a great comfort to many. A financial planner, who knows the family and their financial circumstances well, is well-placed to provide advice, support and to facilitate the financial consequences of the new change in circumstance, when it is needed.
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