Goals are a major part of Financial Planning.
From Risk Management in the form of Insurance, Savings or Wills to Investments, Tax Planning.
Establishing an objective is key in financial, retirement and investment planning.
The objective keeps your mind focused during the journey and your eye firmly on the prize. As I always tell my clients, the success of the instruments put in place is the responsibility of you and you alone. It is your money, your assets at the end of the day.
My job is to help navigate and enhance the journey.
As a financial planner, my goals are important too. As the right goal directs my business in the way I want it to succeed.
The biggest challenge I face as a financial consultant is showing clients that their financial lives are just as important as their career and their family. A good financial plan allows them to ensure that their family is well taken care of in the most catastrophic of scenarios, and ensures that they and their loved ones are financially secure in future.
Today, with all the financial advisers, consultants, insurance agents, bankers in the industry, how does one identify what are the most important attributes a financial consultant must possess?
Here are the 5 key attributes i maintain in order to fulfill my objectives as a financial consultant.
1) Proficiency
Obviously, a financial consultant needs to be proficient in his field. Just like how you would expect a doctor to be medically trained, a lawyer to pass the Bar, a competent financial consultant must be able to understand all aspects of finance planning from risk protection, tax, to investments.
I maintain proficiency by constantly upgrading my skills and knowledge through courses and certifications that will help me advise clients better. A financial consultant that cannot educate you on financial matters relating to investments, property, tax and even CPF, is severely lacking in proficiency.
Be sure to take a good look at the credentials of the adviser as it gives you a good idea of whether he/she is capable of structuring a financial plan that is most suitable for you. A good place to start is to check for CFP certification.
The Certified Financial Planner professional meets initial and ongoing education, experience and professional development requirements, has to pass an exam that assesses competency. He is also required to adhere to a code of ethics and pledged to provide sound financial planning that is in the interests of clients.
In Singapore, of around 20,000 financial advisers, only slightly more than 1,000 are CFP Professionals (Source from Financial Planning Association Of Singapore). That’s only 1 out of 19! And from personal experience, it is not easy accomplishing this certification!
2) Approach and Methodology
The approach and method used by the financial consultant is important. In financial planning, we are taught to put the needs of the client first and consider the limitations of the client before any recommendations.
Often, clients are pushed to take up products on the basis of potential benefits that may or may not apply to the client’s needs but appeal to the opportunistic side of people. This results in mismatched recommendations that are not made in the best interest of the client.
My clients on the other hand, are first enlightened on the aspects of financial planning and three key things will be addressed.
Why do you need this?
Identify Exposures, Unrealized Creditors, Future Needs, Potential Risks
When do you need to achieve this?
Determine the financial timeline and the time horizon that suits a particular individual.
How do we achieve it?
Everyone can have savings. It’s multiplying it that is challenging.
What solution will best take you there?
How do we allocate assets in order to uncap upside potential yet limit downside risk?
How do we manage the strategy and ensure it is on track over the course of our lives?
These allow the client to be much more involved in the process but yet still have available to him/her, the expertise of a financial practitioner for guidance.
By keeping product selections at the very end of the process, the objective, needs and strategy are identified and formed with clarity, uninhibited by the distraction of product pushing.
3) Access to financial products
While product selection only come into the picture at the very end, it is important that the range of products available to you is expansive and never limited to a few choices.
This is a key reason why product pushing is rampant in the industry.
Many insurance agents and advisors are limited to a few products from either one or few providers.
Banks too, usually partner with one insurance company to avail the company’s products to its clients.
This may cause the distinction between a Financial Consultant and a Product Salesman to diminish.
The financial planning process has often eroded to a seller and buyer relationship with the seller’s focus being the successful conclusion of a sale and its remuneration. This is because “product” is being prioritized before needs, objectives and sustainability.
But financial needs are often specific and small differences in benefits from product to product can be important.
A financial consultant MUST be able to provide a variety of options so that the client’s portfolio can be tailored as close as possible to his/her needs and objectives. For example, an insurance agent representing an insurance company may have access to only their insurance products and not investment products that are unrelated to insurance at all.
In order to meet this criterion, I make sure i have access to a product range that can allow me to choose the best solution for my clients. At this moment, i have access to products from more than 40 partners ranging from investment platforms and insurance providers.
I also have access to more than 50 banks and Fund Houses to provide my client with financial options that best suit his/her needs.
4) Tools and Resources
A financial plan lasts a lifetime. An efficient way to track the progress is required so clients can have access to the instruments at work. Being involved in your own financial plan also helps keep the eye on the prize.
Apart from regular reviews which I will expand on in the next point, I avail certain tools and resources to my clients so they can keep abreast of market updates as well as their own portfolio.
I do this through broadcasts on chat services and social media. These range from current financial news, analysis from data obtained via my partners as well as guides on financial issues that plague the average Singaporean.
5) Regular and Meaningful Reviews
A competent Financial Consultant knows that the relationship with a client is lifelong.
The process is never finished.
Financial situations change regularly. Needs are adjusted, and changes need to be made.
It is common today, that the relationship ends as soon as the transaction is concluded.
This is a salesman approach that I mentioned before.
Without commitment there will be no start.
Without consistency, there will be no finish
Investment strategies can change in as little as 6 months in order to mitigate downside risks and uncap upside potential.
Without reviews, there is no active management to ensure efficiency.
In addition, our risk appetite changes as we grow older, welcome a new member to the family etc. Our portfolio must be tweaked to match that risk profile. As a retiree, the needs change towards a more stable investment portfolio that can stretch the assets as long as possible for retirement income and legacy purposes.
If you think my philosophy matches what you look for in a financial consultant, reach out to me for a non-obligatory consult.
Disclaimer:
All Views expressed on this site are my own and do not represent the opinions of any entity whatsoever with which i have been, am now, or will be affiliated.
Any performance represented is historical; past performance is not a reliable indicator of future results.
None of the authors, contributors, administrators, or anyone else connected with this site, in any way whatsoever, can be responsible for your use of the information contained in or linked from this website.
All information contained in this website do not constitute investment advice.
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