Know the value of a certified financial planner

MY REIGN as the Financial Planning Institute’s (FPI’s) Financial Planner of The Year came to an end last month.

I have thoroughly enjoyed sharing my views on what I feel are the pertinent considerations that an investor should focus on when establishing a well-structured and sound financial plan. My goal as the Financial Planner of The Year was to add value in professionalising the industry further.

As this is my last contribution, I would like to highlight my top four considerations shared over the past 11 monthly articles.

The importance of financial planning

Having a detailed financial plan gives you a strategy to make practical financial decisions in all aspects of your life. The strategy is a step-by-step approach to meet your life goals and acts as a guide as you go through your life’s journey.

Although the initial stages of this process are often cumbersome and time-consuming, the plan that emanates from this process provides absolute clarity on your future financial position and that of your family.

The implementation of a longterm strategy, underpinned by a rigorous ongoing management and

The crux of the matter is that it’s critical to ensure that your asset allocation takes account of your tolerance for risk, your short-, medium-, and long-term needs and objectives, and that you stick to your investment strategy – even if it takes years, which market cycles often do!

Partnering with a suitable planner

Your financial planner should be someone you can trust with all your personal financial affairs, someone who understands you as an individual and someone who can help you achieve your long-term financial goals. A Certified Financial Planner (CFP) is a professional who is well versed in the financial services industry and meets the FPI’s ethical and competency standards.

Here are a few questions to ask to ensure that you appoint a suitable planner and what you can expect from the relationship.

1. How do you earn fees? Understanding how a financial planner gets paid is key to understanding your potential relationship. You want to ensure that there is a mutually beneficial relationship and that the planner won’t be taking action just to earn a commission.

2. What are your credentials and background? Understanding the planner’s educational background and professional credentials is important. Is your planner a CFP professional and a member in good standing of the FPI? What is their holistic financial planning experience, background and understanding?

3. What processes do you follow to determine your client’s needs? A rigorous financial planning process, subscribed to by the FPI, incorporates six clearly established steps designed to ensure effective, professional, longterm, and bespoke intergenerational financial planning.

4. What services do you offer? Choose a planner who suits your needs, whether it’s a product-specific need or a specialist service. Ensure the planner can cater for your long-term needs.

5. Do you have any potential conflicts of interest? Choose a planner who is able to offer you independent advice and services and products that are appropriately aligned to your needs.

6. What is your service offering and client communication? The implementation of financial plans should be underpinned by rigorous ongoing communication and review.

Finding a suitable financial planner is not a simple task and the process can be different for everyone. You need to actively search for someone who’s going to work for your best interest, ultimately forming a mutually beneficial relationship and that takes some time.

Trusting the process

Saving for your future and investing is all about your ability to adapt to new circumstances. If 2021 and 2022 are anything to go by, this is most likely your character trait that has been most challenged.

As you experience the ups-anddowns, you can decide to let them “sharpen” your life skills, in the end making you more resilient and competent. The same goes for financial planning.

What makes a good long- term investor is the ability to structure and commit to a sound financial plan, while at the same time holding that plan loosely enough to adjust along the way.

Trusting a sound process will ultimately get you to your financial goal!