When you’re asked the question, “What do you do for a living?”, are you able to respond quickly and clearly? In our industry, people in my position sometimes either try to over complicate their answer or don’t really know what to say at all. I like to put it quite simply…
When you need legal advice, you talk to a lawyer, when you need tax advice you talk to an accountant, when you need financial advice, you talk to me.
That’s a simple and clear enough way of putting it. However, many people don’t realise that I’m probably the most underutilised but more often then not most needed out of the three services.
There is a need for good professional financial planning at almost every stage of a person’s life. No matter where a person sits in terms of their financial life cycle, 9 times out of 10 they are a consumer of financial products. If the concept of a financial life cycle is an alien one, a professional financial planner will help outline what these stages are, and where that person sits within it.
But a financial planners job doesn’t finish there. Identifying where one lies in this timeline is part A. Part B is navigating it to ensure that they are making the right decisions with the right products.
Take financial protection for example. The time in your life that you need financial protection most, whether that be life insurance to protect dependants or income protection to protect you and your lifestyle, can vary from person to person. But if and when you know you need it, utilising a professional to identify the correct product is invaluable.
There are 6 providers of life insurance in Ireland and of these 6, there are approximately 46 different styles of contracts to choose from for insurance. Within these 46 contracts, there are up to 2000 different product specifications to select across them. A professional advisor has the tools and knowledge at this disposal to analyse and research the life insurance market on behalf of their clients to ensure they have the right contract for their circumstances.
Another field of financial planning where engaging with a professional advisor is crucial is in planning for retirement. There are a few certainties in life. Everyone who works during their life is going to retire at some stage. That’s for certain. But whether that person can rely solely on the state pension to provide for them and their dependants is uncertain. 90% of the time the state pension is not going to be enough. So therefor private pension funding is a must for private sector employees.
What are pensions? How do they work? Are they worth it? What will I get back? What are the charges? Are there any incentives? Will I have enough in the end?
If a client finishes engaging with a professional financial advisor and still has any of these questions in the back of their head, then the advisor hasn’t done his or her job.
Financial Protection and Pension planning are just two facets of financial planning where a professional qualified advisor can help. There are many though. From a person in their early twenties just out of college, to a married couple looking to move home, to a 66 years old retiree. There is always a need to engage with a professional advisor.
So that’s why when I’m finished explaining what it is that I do for a living, my next question back is “So where do you currently sit on your financial life cycle?”.