The Changing Role Of Financial Plannerschanging role of financial advisers

In The Beginning

The financial planning industry started to develop when life insurance brokers began helping their clients with financial issues outside offering just life insurance products.

These life insurance brokers were predominately sales-people, which meant the planning profession grew from a sales-based background. As a new poorly regulated industry with a sales based background, low entry requirements and healthy profit margin, the financial planning profession was impacted by a few ‘bad eggs’ who didn’t always act in their clients best interest. Financial planners have long suffered negative sentiment and lack of trust from consumers and the media as a result of this rocky beginning.

Moving Forward

I more recent years, quality financial planners have wanted to distinguish themselves from the pack by developing their ‘value proposition’ to identify how they can help their clients beyond ‘selling’ products.

This move toward value and a focus on strategic advice over product based advice helped the industry evolve into a profession of qualified experts who provide much more than just insurance products and investment funds. Financial planners now have several professional bodies and work in one of the most highly regulated professions.

Many of the improvements were driven by new legislation, increased competition and professional bodies. The financial planning profession has come so far in the last few years you can’t compare the original industry to today’s professionals. It’s like comparing apples to oranges.

The Role Of A Financial Planner

A quality financial planner works with their clients to provide advice that is highly personalised to their individual needs, goals and preferences.

A financial planner’s role can cover various areas of a client situation, including:

  • Goal setting and accountability
  • Cash flow management / Controlling spending habits
  • Savings plans
  • Debt reduction and credit card elimination
  • Retirement planning
  • Superannuation
  • Tax planning / minimisation
  • Children’s education funding
  • Investment planning
  • Risk management
  • Insurance planning
  • Estate planning
  • Business succession planning (for business owners)

Different Types of Financial Planners

Like many professions, some financial planners have chosen to specialise in a specific type of advice, such as retirement planning, or small business advice.

When seeking financial advice, you need to be aware that not all financial planners are equal. Some are experts, while other choose a more generalist approach. You should find financial planners who specialises in the type of advice you require.

Benefits Of Financial Advice

Having a quality financial planner is like having a coach. They understand your situation, needs, desires and weaknesses and can provide you with advice to help you make informed financial decisions.

For example, if you had an extra $100 per month, should you reduce your credit card, pay it off your mortgage, or save it towards your children seduction? A financial planner can provide you with advice on your best options taking into account your specific situation.

They keep you accountable to your goals, help manage your spending habits, answer your questions and help you build your financial knowledge, skills and confidence.

{ 1 comment }

Trulity Financial Planning November 2, 2012 at 10:53 pm

I want to know more about the financial planning. Can you tell me the name of the book of this type?