Key points on your financial wish-list
HAVING ADVISED clients for around a quarter of a century, I hope I have some understanding of people’s priorities when addressing their financial needs. In fact, I often feel the role of a good financial adviser can be compared to that of a counsellor. Both need to be a good listener and hear not only what is said by the client within the meeting but also what is not said but is understood in the discussions.
I believe the initial priority of most people is to feel secure in their financial circumstances. This will include having enough income to cover their daily expenditure needs, sufficient income to provide them with a comfortable retirement and an emergency reserve in case their financial circumstances worsen.
This need to feel secure may lead clients to consider taking out life insurance or other policies to protect their assets/income for their dependants if they died or suffered a critical illness.
The desire for sufficient income in retirement often translates, in financial planning terms, to allocating sufficient funds to pensions and other savings so a target income can be drawn from those sources in retirement.
A secondary financial objective for many clients will be to “fulfil their dreams” and this could mean going on luxury holidays in retirement or buying a holiday home.
This again will have financial implications that can be addressed by an experienced adviser. We are increasingly using lifestyle planning tools and cash modelling to build plans with clients to enable them to meet specific financial targets so that these dreams can become a reality.
There will of course be some clients who feel completely secure in their financial circumstances and also have enough resources to fulfil their dreams.
I categorise these clients as those who wish to feel they are “winning” in hitting financial targets through their investments. This may mean achieving a specific return and so perhaps viewing financial objectives as part of a “personal business plan” which needs to be regularly assessed and measured against particular targets.
I hope this article has demonstrated the importance of having an adviser who understands your needs and can work alongside you in achieving your own wishes, however they are expressed.
A good financial adviser is like a counsellor’
Adam Katten is managing director of NLP Financial Management, 020 7472 5550, firstname.lastname@example.org