A Financial Planner or Adviser provides advice to clients in relation to life insurances (life, Total Disability / trauma and Income Protection), superannuation (Retail Super / Industry Super / Self-managed Super) investments (managed funds / shares) & Centrelink (Age pension / disability etc).
An important part of a financial adviser’s job is helping clients understand what they what from their finances. It is about getting them to relate their personal goals back to their finances and understanding how the two impact each other.
Finally, financial advisers have to find new clients! This is a huge responsibility younger advisers struggle with. If you talk to most successful advisers who are late in their careers they will tell you that prospecting for clients and generating new business is an incredibly important part of the job.
Why did you decide to become a Financial Planner?
I became a Financial Adviser because I wanted to work closely with clients and help them reach their goals. Rather than dealing with ‘financial advice’ in a corporation I wanted to see firsthand the difference my advice could make for clients.
What path did you take into it?
As a graduate I started work in a boutique financial planning firm as a para-planner. This is a great way to get a thorough understanding of financial planning, before you sit in front of a client on your own. I had great mentors who trained me in preparation for client meetings and this made a huge difference.
I know of other advisers who had worked in other areas of the financial services industry who went straight into being a financial adviser as well. I think one of the most important things to understand is that reputation is very important in financial advice – and given this you should aim to work for a reputable company from the beginning.
What, in your opinion, is the best bit of being a Financial Planner?
Great Financial Planners or Advisers provide their clients with clarity around their finances. As a financial adviser you genuinely can help your clients. Next to health and family, personal finances are one of the most important thing in a clients life, but sometimes they don’t know what to do and can become paralysed with fear. As an adviser, I helped a lot of people relieve themselves of that fear.
Every job has its downsides. What do you think are the worst bits?
Financial planning is heavily compliance orientated. This can take up a lot of time and can be quite dry at times.
Being a successful financial adviser is just as much based on generating new clients as it is about knowing the legislation around super and which insurance is best for your clients. It doesn’t matter how much you know if you have no one to tell! I don’t think this is a bad part of being a financial adviser, but it can be a reality check for some when they start out.
Is it what you expected when you first started out – and what’s different?
As I said above – it is very sales orientated. Not “hard sales”, like selling cars, but you really do need to network and build relationships with other professionals, like solicitors and accountants.
You should also be prepared to approach friends and family in the beginning – not to necessarily take them on as clients (although it can’t hurt), but to help spread the message that you are an advisor. My best referral partner was my wife – if she ever heard anyone talking about financial services she would leave my card with them and as k if I could contact them.
What do the public least understand – or mistake – about what you do?
The financial services industry has a poor reputation given the disgusting behaviour of some individuals who masqueraded as Financial Advisers. As a result, people tend to be quite stand-offish when you broach them with the idea of financial planning – however once you get over that hurdle, most clients can’t think what they would do without you.
The industry super fund movement has also done a good and bad thing with its focus on fees – while it is important to focus on fees it is a matter of you get what you pay for and people who don’t understand superannuation don’t understand this.
Financial advice is all about tailoring a financial plan for the individual. Case in point: The GFC was the buying opportunity of a lifetime for someone who was young and had spare cash available to buy shares. If you were a 60 year old pre-retiree however (and you hadn’t received appropriate advice) you would have been very nervous seeing your retirement nest egg halve in a matter of months.
In that instance it doesn’t matter whether the individual is in a retail fund or industry fund – if they don’t have the right advice (i.e. the right investment portfolio), their finances will not align with their goals and they will be disadvantaged financially.
What kind of people tend to do well?
You need to be good with people and be able to communicate complex ideas into easy to understand language. I had a colleague who knew everything about anything but couldn’t communicate this knowledge to potential clients – he is now no longer an advisor.
You also need to be good with handling rejection. As above, there is a sales component to being a Financial Adviser and you need to understand that sometimes you will miss out on getting a new client – but it’s important not to take it to heart. The trick is to focus on helping those who accept your offer for advice.
Essentially, financial advice is not rocket science, but you have to relate to people.