5 Qualities to Look for in a Financial Planner

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Working with a financial planner can be life-changing. It can help bring clarity to your goals and allow you to really make sense of your money.

But equally, a relationship with a financial professional is not a decision to be taken lightly. This is a person that you will hopefully want to meet up with at least once a year, maybe more, and who you will need to entrust with your personal information and most deeply-held goals.

It is not enough to choose someone that you enjoy having a chat with, as this doesn’t mean that they are highly skilled or fully focused on what you want to achieve. It can be tempting to work with someone based on humour or affability – while these qualities can help you build a rapport, they are not always indicative of financial planning skills.

So which qualities are the most important when choosing a financial planner?

1.   Listening

A good financial planner will listen more than they talk, particularly in the first meeting.

Financial planning is highly regulated and has certain barriers to entry, such as qualifications, regulatory checks, and relatively high costs to remain in business. A basic amount of due diligence should be done before you even contact a prospective firm, such as checking their entry on the Financial Conduct Authority’s register.

You can also check online if your adviser has Chartered or Certified Financial Planner status. This will usually be displayed on the firm’s website as well.

This means that things like qualifications and regulatory permissions are a given, not something for a financial planner to impress you with at the first meeting.

The first meeting should be all about you.

A good financial planner wants to know all about your goals, objectives, family situation and general attitudes towards money and risk. They will take the time to fully understand your financial position before making any recommendations.

2.   Clarity

A good financial planner will be clear and upfront about their service, and when answering any questions you may have. For example:

• ·       They should be able to explain their standard charges and provide you with this in writing. While charges can vary for different clients, there should be a clear, consistent charging structure used throughout the firm. Be very wary of advisers who are reluctant to disclose their charges

• ·       They should be able to tell you about their proposition and how they can help you.

• ·       While it’s reasonable to discuss the types of solution that may be used, they should not make recommendations until they are fully clear on your situation and what you would like to achieve.

• ·       They should give you accurate timescales and not over-promise.

• ·       Your questions should be answered clearly, without jargon or condescension.

 

3.     3.   Long-Term Focused

A financial plan is centred on your goals, not products or performance.

A good financial planner will be looking at your investment plan in terms of a lifetime of investing, potentially 20-30 years or more. They will be less concerned with quartile rankings, or which funds exceeded the benchmark over the last three months.

Any recommendations should have a clear, long-term benefit. High-profile shares and complex investment products may sometimes have a place in a portfolio, but they should never be the main selling point.

A financial planner will focus on the following:

• ·       Making sure you can achieve your goals
• ·       Addressing any risks and contingencies
• ·       Seeking steady and sustainable progress

They should not:

• ·       Push you to invest in products you are uncomfortable with or don’t understand
• ·       Select funds purely based on short-term performance
• ·       Recommend investments when the money would be put to better use topping up your cash reserve, clearing debt, or arranging protection.

 

4.     4.   Honest, Even When It’s Difficult

A good financial planner won’t always agree with you, and may gently challenge your assumptions or requests. An adviser who simply follows your instructions without question can be even more damaging than a pushy adviser with good intentions.

There is a balance to be found. You may seek advice because you would like to take a certain action, for example, encashing or transferring a pension, or buying an investment property. While these options can seem like a good idea, there are multiple reasons why they may or may not work for you.

A good adviser will work with you to find out what you ultimately want to achieve, beyond the mechanisms of investing or accessing your money. They will then look for the best ways to get there, taking into account everything they know about your situation.

This can involve some difficult conversations, for example if you are in a vulnerable situation, or if they simply need to tell you that you are overspending.

They will also need to tell you when your investments have lost money – this is a feature of investing that should be clear at outset, and not ‘bad news’ to be concealed or sugar-coated.

While the financial planner may disagree with you or point out facts that you don’t want to hear at first, you should still feel respected, listened to, and confident that your goals are at the heart of your financial plan.

 

5.   Respectful of Your Time (And Their Own)

A good financial planner needs to be organised and have a degree of infrastructure in place. Whether they have a whole team behind them, a single trusted office manager, or a well-used iPad with various gadgets and outsourced services, they cannot do it alone.

The firm should have solid systems and processes, which means you should be offered a meeting at the agreed frequency. The agenda should be clear and concise so that everything is covered in a logical order and within the allocated time.

Don’t be offended if your financial planner needs you to make a routine appointment well in advance. This usually means they have an organised diary and that your meeting should be well-prepared and free of interruptions.

Equally, they should be flexible enough to take the time to discuss anything urgent or worrying within a reasonable timeframe.

A good financial planner will aim to work in partnership with you to achieve your goals. This should be based around respect, clarity and long-term sustainability rather than quick fixes.

Please do not hesitate to contact a member of the team to find out more about financial planning.