Now that you have engaged a financial planner, you have almost added a new family member. So like a relationship, it will be a transactional cum aspirational experience. You can make Working with Financial Planner smooth by following these tips.
Like many things in life, what you get from working with a financial planner depends to a large degree on how much you put into it.
Basic requirements for Working with Financial Planner
Starting the planning process early in life, maintaining open lines of communication with your planner, involving your spouse in the planning process, and thinking not just about financial goals but personal dreams and ambitions can go a long way towards building a rewarding life, both while you are working and after you retire.
Successful financial planning can require a conscious effort that sometimes runs against your thinking or we call it psychological makeup.
Let’s see some areas where you can help in Working with Financial Planner:
Late arrival means friction & stress
There’s an old saying- if you wait to have children until you can afford them, you’re not likely to have children.
It’s a lot like that with financial planning: if you wait until you have time on your hands or some investment figure in mind- you may never get started.
It’s a truth that majority do not like to plan. They are busy with work and with their hectic lifestyles.
Achieving financial security could be a lot harder if you are late. Your work, stress, and planner efforts are going to increase if you delay and join late.
You haven’t just lost time you’ve lost compounded interest, which is a huge opportunity lost to anyone trying to build wealth over time.
The sooner you begin saving for retirement, the better your chance of saving enough.
Your life partner is your financial partner
Men historical have been viewed as default driver when it comes to family finances.
This is a completely outdated as nearly all women today share equal house burden. They work or not is a family choice but yes they have an opinion.
Many are the primary decision maker on their family’s biggest and most important buying decisions. They are the stakeholders.
While men tend to focus on the bottom line or end goal, women tend to think more contextual about how decisions will affect not only themselves but their families.
Women have a longer life expectancy than men. Financial plan and investments will serve the wife longer than the husband. By including both marriage partners in the financial planning process you are saving your time and future hassles.
In case you see your financial planner neglecting this aspect, tell him firmly- “Sir, two heads really are better than one”.
Appreciation for process
Financial planning & wealth management is a much-regulated industry. Don’t expect that you will just glance 2-3 reports and sign a couple more and you are done. No, a regulated financial advisor will follow a complete process of elaborating the scope of work, charging his fees, making a plan & IPS (Investment Policy Statement), taking approvals before executing & taking approvals on matters like disclosures or management agreements.
These are processes laid for smooth functioning. These are protection against mal-intentions and mal-practices.
Never consider them as a trust issue. Many of these emails/reports are required by regulator or auditors.
Processes also ensure that a vital information or a check is not left out which may haunt afterwards.
Believe me, I am also not a fan of long emails or detailed legal looking disclosures but I believe firmly that it ensures clarity.
Financial Plan is X-ray. Treatment will follow
Your financial plan may have highlighted a goal not fulfilling or areas which are a pain. Don’t assume that this is the end. A financial plan is like an x-ray film and not a medicine.
Treatment will follow after diagnosis. It may be hard now but you have to wait till the new strategy takes shape in form of security.
Another aspect is – as we grow older, we process positive and negative information differently. When we are young we believe life’s too short to worry about long-term things. We assume that everything will work out in the end. So we don’t want to believe that treatment is here.
When it comes to financial planning, plan warns and you run the risk of filtering out negative information that should not be discounted. Negative does mean unworkable.
Only numbers should not be a focus area. Life will be dynamic.
Financial planning numbers on canvas – the amount of money you have to need to save before you can retire to a life of travel. But these are not like a balance sheet and you are not the Accounts Officer.
Don’t just focus on how much money you‘ll need in the abstract, but on the real products and services, you are going to apply for.
Start thinking about options regarding health, eldercare, long-term care, second careers, starting a small business, even housing, transportation and home modification etc.
These should be part of your compressive longevity planning.
Do not just focus on retirement number. Life will take many turns before you retire. These turns will impact the retirements.
Your choices should not come in between
A good plan will provide you with the ability to execute on your retirement plans, not just save for them.
To make that possible, the financial planner will incorporate concrete solutions into your financial plan. That solution can take the form of products & investments. These can result in disagreement due to past experiences or like a brand.
For Eg, I recommended Reliance Growth Fund to one of my investors but he said, he does not wish to invest in any company connected to Reliance Power (IPO debacle in 2008).
Help financial planner to address these issues. Have an open mind. Your choices sometime may toughen job of your planner.
Financial planners know that their most successful clients rely on them for more than saving and investment advice. By bringing your best efforts to the planning process, you can ease the process pain.
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