Where To Start?
Contacting a financial adviser can be a bit daunting. You’ll probably be wondering what sort of questions they’re going to ask and in what direction the conversation is likely to go.
You may have not dealt with one in the past or it could be that your previous experience of dealing with one was less than positive!
In my view, financial planning isn’t rocket science. It’s simply a way of aligning your goals and objectives in life with the money you’ve got and working out how to use that money to get you where you want to be.
A decent financial planner should first spend time getting to know you and what’s important to you. Your money, at least at the start of things, should be of secondary importance.
Understanding you and what makes you tick is the key to a solid and trusting relationship. All financial decisions should flow from this.
Where Are You In Life?
It’s a pretty heavy question but it’s an important one. You might be at the start of your financial planning journey. Maybe you haven’t got a great deal of cash, but you want to start small towards building your future financial security.
At the other end, maybe you’re retired and have enough money to live on along with additional funds that probably does the job of giving you peace of mind and security should you need care or want to pass money down to your loved ones.
Financial planning can cover both these extremes and, pretty much, everything in between. Whatever age we are or life stage we’re at, we probably have objectives or, at least, can identify things that are important to us.
Take a Step Back
Naturally, when we engage with a financial planner, it’s probably for a financial reason. That said, it’s important to take a step back and put the money to one side. Think about what you want out of life and when you might want that to happen.
Taking this approach helps you build a framework within which you can make your financial decisions. Anything you end up doing with your money is linked directly to what’s important to you and what you want to achieve. That should be the benchmark for assessing whether your financial arrangements are successful or not.
Focus
As I said earlier, it doesn’t really matter what stage of life you’re at for financial planning to be useful. We’re all unique and have our own take on life. What’s important for some isn’t so important for others but, almost certainly, having enough money to feel safe and secure is something that’s common to us all.
Taking time to think about things (and a good financial planner should help you to do this by asking great questions and listening carefully) will really help you formulate what’s truly important to you. Focus on what you want rather than just the money you have!
This thinking will give you a platform from which you can organise your money. This is probably where the traditional role of a financial advisor comes in. Getting your money organised.
Making It Happen!
Depending on what’s important to you, a financial planner should be able to assess where your money is now and help you understand if it’s doing what you need it to do or if you should make some changes.
It could be that your money isn’t as efficient as it could be which could include things like reducing the tax or costs you pay or having the flexibility to access your money easily when you need it.
Whatever the reason, you need to understand how your money is linked to your objectives. Is it working towards what’s important to you or against it? Without the thinking you’ve already done on this, it’s impossible to know.
Getting your money organised and into shape is like using the right materials to build the house of your dreams. There’s plenty of ways to build a house, but you don’t want leaks, damp, and a dodgy roof! You want the house to be as close to your dream home as possible!
Review, Review, Review!
There’s a very good chance you’ll need to change direction, more than a few times along the way. Life has this annoying habit of throwing bad (and, sometimes good) stuff at us.
Things that change in our day-to-day lives could have an impact on our long-term goals and, perhaps, our views on what’s important to us. I’ve seen it countless times.
Reviewing your financial plan and the money you have in place to support it is a crucial thing to do. How do you know if you’re off course if you don’t re-check and re-think regularly?
And That’s It!
Sounds simple doesn’t it? You’ll notice I’ve not talked about financial products (pensions, ISAs, bonds, bank accounts, etc).
That’s because these are just the materials you’ll use to build your house. It’s the job of the financial planner to make sure you have the ‘right’ materials (products) to get you where you want to be.
Hope you found this useful and you know where I am if you need me!...