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Focused Advice is not Really Financial Planning

Marlene Shalton CFP Great BritainBy Marlene Shalton, CFP

I am often asked what area of work I specialise in and I always reply, “financial planning”. In addition, I consider that I undertake ‘comprehensive’ financial planning and not ‘holistic’. The latter means you have to cover every aspect of your advice and could lead you wanting, whereas the former is extensive, covering most.

The main reason I make a point of being a comprehensive financial planner is because I do find it difficult to advise a client on various matters in isolation. So much in our lives is interdependent on other aspects: the cause and effect. If we have to consider one part of our lifestyle, then surely we have to look at the bigger picture to ensure that whilst we are solving one problem, we are not creating another elsewhere.

So it can be difficult when a potential client comes along with a specific presenting issue, to get them to talk about other financial aspects. They can find this unusual and may resist offering you the information you need. For me it is important to persist, and this is why the use of personal skills, deftly and with sensitivity, are crucial.

Cash flow modelling, once you are able to present this, usually demonstrates the importance of the overall view, but it is getting to that stage that some planners find the most daunting. One way, is to acknowledge the issue the client brings and promise to address it in time, but stress the need to know more about them, their lifestyle and their objectives in life. Focusing on these keeps the presenting problem in perspective, until the client realises that it isn’t just a pension fund or a sum of money they wish to invest that needs a solution.

A Comprehensive Financial Plan is a Logical Conclusion

Once the client is able to talk about what they really, really want, moving to a comprehensive financial plan is a logical conclusion.

Of course, it does not always go like this. The client may be persistent in just addressing the single problem as he or she sees it and no amount of persuasion or encouragement may get them to see otherwise. This is when you need to examine your business model and whether it will accommodate what I call “project work.” Sometimes accepting what the client brings may eventually lead you to a full financial plan, but in my view this collusion inevitably means that you do not and you end up with a hybrid of clients having to provide different service levels.

Personally, I am quite strict about my business proposition, and it would be the exception rather than the rule to offer scaled advice. To me scaled advice is not really financial planning and quite honestly you are are fooling yourself if you think it is.

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