Keys to Successful Financial Planning

2. CHAPTER 20 Keys to Successful Financial Planning

3. Overview • Is financial advising an art or a science? • In years to come you will no doubt have reached your own answer to that question; however, for the purposes of this final chapter, let’s assume it is a combination of both. • In effect, the aim of this chapter is to illustrate in a practical sense how to bring • together both the technical and human competencies in order to deliver professional financial advice to real people.

4. The Nature of Advice • The rendering of financial advice is about advising real people with real goals and real aspirations across a wide range of demographics and personality types. • While, legislatively, advice is in writing, corralled within a rigid framework of compliance, advice is also given verbally, in client meetings for example. • It is a process of delivering competent, professional, advice to people, underpinned by technical skills.

5. Listening • In order for your client to truly understand that you really are listening to what they said, you need to ask questions related to what was said. • Demonstrate that you listen by asking questions related to what was just said by the client. • By asking questions, the adviser is getting ‘to know’ their client better.

6. Empathy • A basic definition of the word empathy is that it describes the process of sharing in, or at least being seen to share in, the pain or sorrow or hardship that another person(s) is experiencing. • Empathy is very powerful in establishing and/or strengthening human relationships. • Empathy helps to put a ‘human face’ to professional advice which might otherwise seem cold, sterile and clinical.

7. Expectations Put yourself in your ‘clients shoes’. Go over your advice from the client’s perspective. Ask yourself: • do my statements ‘sound’ professional? • do they seem reasonable or unreasonable? • am I (as the client) comfortable with the statements? • would I (as an advisor) be prepared to guarantee the outcomes referred to in the statements? • If you would guarantee the outcomes, would you be prepared to back the guarantee with your own assets? • does anything concern or worry me (as the client)?

8. File Notes • File notes are a written record of your conversations with clients and supplement other forms of written communications with clients such as SOAs, ROAs, letters and emails. • They are an opportunity for you to record key aspects of a discussion which might include comments made by both parties. • They should be completed as soon as practicable after the conversation (be that a meeting or phone conversation)

9. The Client’s Perspective • One of the most important and challenging aspects of financial advising is to constantly keep in mind the client’s perspective. • Remember, a Statement of Advice could be the most technical and complex document a client may have dealt with in their entire life to that point. • In providing advice you are providing an experience to the client, not just a written document. • It is your role to help the client understand your advice.

10. When times get bad • Be mindful that every day your clients are hearing, watching or reading news and hour by hour share market movements, even on a ‘good’ day of trading. • You have a vitally important role to balance such commentary with un-emotive facts and commentary on an ongoing basis. • You will sometimes need to report to clients that their investments have declined in value. • It is a process of communicating with clients in person at, for example, regular (say six-monthly) client review meetings; in writing; in, for example, regular client economic and market update functions; and by telephone.

11. You can’t help everyone • Remember, while you provide the advice it is always the client who makes the final decisions. • There are times when no amount of ‘people skills’ will help a professional relationship if the ‘chemistry’ is not right. • At some stage in your career you will lose at least one client — that is a given.

12. Comforting Clients • As a financial adviser, at some time you will lose clients and/or their relatives to death. • Some clients will ‘invite you in’ to their grieving while others will keep their distance. • Some will need lots of help and guidance — particularly in situations where the deceased was the one who ‘handled the money’ — while others will not need much else from you apart from your normal services.

13. Your Career • No amount of reading and study can prepare you for everything you are going to experience as a financial planner/adviser. • It is a broad and complex profession which requires a very wide range of knowledge and skills. • ‘Real life’ will at times be vastly different to what this and other learning suggests you will find. • Honour and protect the trust your clients will have in you. • Good luck!