What is financial planning?
First published 11 April 2014 • Updated 08 August 2017
Financial planning is a ‘people’ business, and is a long way from the old perception that financial advice is all about arranging products on a one-off basis.
When we meet clients for the first time they often have a pile of paperwork that represents their financial lives, with boxes stuffed full of tax records, financial statements, brochures, schedules and general documents both current and obsolete. On occasion, we have filled our offices with a lifetime of accumulation or opened doors in clients’ homes to a wonderland of paper storage.
“All our mortgages, pensions, savings accounts and insurance can look meaningless until it’s rearranged and organised. Rather like choosing the letters on the quiz show Countdown”
In these situations it really is impossible to ‘see the wood for the trees’, and there is often a great deal of anxiety and confusion to boot, particularly if we are meeting following the death of a loved one. Most of us are busy and it’s rare that we get time to think, in a comprehensive way, about all the elements that makes up our lives so we simply collect and hoard ‘stuff’.
In progressing through life we generally take out a mortgage (ideally with some life and health policies), then start a savings account and maybe a pension plan or two, then take out another policy and we inherit some shares… and, rather like choosing the letters on the quiz show Countdown, it looks meaningless until it’s rearranged. Over time some folks build a giant financial mess that doesn’t have any cohesion or relevant purpose for their current and future plans.
Real financial planning is the process of bringing order to these situations. After we spend some time with our clients they trust us to pick up the disparate pieces and rearrange them neatly into the shape that is appropriate for them. Financial planners are good at creating order out of disorder, trimming the fat from financial charges and ultimately setting our clients down new paths through the trees – hopefully to their chosen destination! Financial planning is a ‘people’ business, and is a long way from the old perception that financial advice is all about arranging products on a one-off basis.
About the author
Joss Harwood is a Chartered And Certified Financial Planner at Eldon Financial Planning. She is passionate about providing a service to help people achieve their objectives rather than selling products.
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