Edward Kennedy Mason Financial and although it was published in October 2013, it is timely today because we are close (in Canada) to filing taxes. Looking at taxes and tax filings always makes me and my friends pay more attention to our financial situation so the advice offered here is useful.
You can view the original report here as well as contact Rick Torrington and look at his credentials if you feel the need.
Many financial planners are all too prepared to pitch the latest investment product and in doing so they miss creating a comprehensive, holistic relationship with their client. During financial planning they often speak over their prospective clients, do not listen to them and have no understanding of their unique parameters. I call this lazy planning and lazy investing.
Essentially many financial planners don’t plan. Instead, they are trapped into product pitching and order taking. Financial planning is not like ordering a new car with the latest accessories and the beautiful smell of new leather. It is a holistic process to understand who you are working with by discovering their needs, often through several meetings with serious conversations instead of the old school selling approach.
Specifically, some financial planners will push a prospect through selling questions such as, “If I could show you a way to increase your income are you prepared to make a decision today”? How can any individual make a decision on a serious issue such as income in one meeting? In my opinion, you cannot.
True comprehensive planning takes time due to the unique nature of every prospect and client. Further, I find financial planning is a dynamic process due to changing circumstances with the economy, family situations, health, resources and employment, to mention only a few.
A holistic financial planner provides clarity by asking good questions and listening. Individuals provide further clarity through their honest answers and good questions. It is really a collaborative effort and very rewarding for most when conducted properly.
The following are red flags that should warn you not to work with a financial planner:
1. Just trust me, I am the expert – Trust is earned and not given. Proper leadership and thorough interviews help build trust. Pushing does not gain trust – it normally creates anxiety, worry and buyer’s remorse.
2. I will prove I am the expert and smarter than you – Talking over people makes them feel inadequate and uncomfortable. All too often financial planners want to prove they are credible. Credibility can be established without being condescending and speaking above the client. Credibility is earned through rapport, trust and putting one at ease.
3. My investment strategies are a proprietary secret – Financial planners usually have the same tools and they are no secret. It is how the tools are applied to the unique circumstances that make them work well in most cases. Again, I really must emphasize that the planner and client take the appropriate time to understand the distinctive nature of their circumstances. Following this process will allow the client and planner to decide if there is a real working relationship between them.
4. My values are the most important – Nothing could be further from the truth. Everyone has their own values and it is not the financial planner’s job to force their values on the client. Proper discovery with the client uncovers their personal values and needs. The rest naturally follows once these are truly understood.
5. I don’t need to educate my client – How can a financial planner implement a plan without the client understanding it? Clarity in any plan is of paramount importance. Once clarity has been established, a financial planner can lead the client through a proper implementation process with ease.
Financial planners have a fiduciary responsibility to put their client first, not their own interest or checkbook. When considering working with someone, have self awareness of what feels right or wrong. Remember, it is your money, your plan and your future.