Financial Planning Explained, with Cathi Harrison
Financial Planning Explained, with Cathi Harrison
👉 Confused about the value a financial adviser can offer?
👉 Don’t understand the difference between a financial adviser and a financial planner?
👉 Wondering whether you need one at all?
💸 In today’s episode, you’ll get all the answers, as I speak to Cathi Harrison, who has been in financial services since leaving university and holds both chartered and certified financial planner status.
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finding an adviser
“An adviser typically focuses on a single area — eg. your retirement planning. A financial planner will typically be much more holistic —they’ll take a step back and say, let’s help you create a plan for your life overall.”
The vetting process for finding an adviser varies massively depending on the kind of advice that you're looking for.
Start with doing research online — you want an adviser that is near you so you could go in and see them in person. However, a lot of financial advice businesses are now set up to work with clients all around the UK.
If you know somebody who has used an adviser and is happy with them, that's always a great place to start. It's such a personal industry, but it's like with anything — just because they're right for your friend doesn't mean that they'd be right for you.
There are advisers who are very focused on the younger generation and making advice accessible for them. It’s a good idea to look for one that is open on their fees.
Don’t be afraid to talk to them! Financial advisers are in this job because they love speaking to people. They will all give you some of their time for free just at the outset to find out if there's a good relationship that fits.
There's a minimum standard of qualification that all regulated financial advisers have to achieve in order to be advisers.
The advice industry is very heavily regulated. While many advisers will then go down additional routes and get higher level qualifications, that doesn't mean that just because somebody hasn't got them, they're not a good adviser.
An adviser typically focuses on a single area — eg. your retirement planning. A financial planner will typically be much more holistic —they'll take a step back and say, let's help you create a plan for your life overall.
It very much comes down to how much do you need right now, how much do you think you need, and what are the areas that are causing you concern. It’s about being really clear on what it is that you want to talk about, and then being open with whoever you end up working with about your circumstances, so they can identify if there's anything else that has been missed.
the fees involved
With a financial adviser, as with an accountant or a solicitor, they'll all have their own charging structure. It’s a bit like: you could buy a white t-shirt for £10, but you could also buy a white t-shirt for £100 — they're both white t-shirts. Different people will get different value. Some will be quite happy with a £10 one and not need more. Some would rather pay the £100 and hopefully get more use out of it for a longer time frame.
The key thing with advisers is that a lot of the regulation means that advisers are completely open and transparent at the outset and entirely throughout regarding their fees.
On average, it will either be a fixed fee, or a percentage if you are looking to invest. If there's any ongoing advice, if you're going to build a relationship with them, and they're going to meet with you once or twice a year — there will be an ongoing fee as well, which again is very normal, but it should always be disclosed up front.
You need to absolutely feel confident to say, “can I have a client agreement, can I have an indication of your charges?” Have that conversation with a few different firms, ask them — “what value do I get for paying those fees?” And then you'll have a range of options, and you decide which one it is that feels right for you.
what to expect
Advisers will do a free initial consultation. At that initial meeting, it is very much around why you're looking for advice. They'll tell you a bit about themselves, maybe a bit about how their business works and the type of service they offer.
Try to have a couple of initial meetings, or have some with a few different firms because again you can have a look at fees, but this relationship and is between you and the firm, and you will only be able to actually feel whether it’s right for you by sitting with them, whether in real life or on Zoom.
Once you've made that decision, you would typically sign up with somebody, and then you would get into your official first meeting, which is where they are going to start to drill down into a lot more detail about you and your goals — because ultimately, that's what financial advice should be for. It should be to help you achieve the things that you want to achieve in life and money is the enabler to get there
A good fact finding meeting will find the facts about you, which is going to be the dry stuff and your date of birth, your salary, your current assets. But it's also going to be what we call the soft facts — what it is that you want to do, what we think it is that's stopping you from getting there, and then you start to pull a plan together to take you from A to B.
Many firms now have apps — so you actually go into the app and within the app it'll say, give us this information, and then obviously you're filling it out in your own time.
After you’ve had this meeting, there will typically be some sort of plan. It could be that it's the overall financial plan of your entire goals for your whole life — which could include a cash flow.
You will also get a suitability report, and what that aims to do is explain exactly what is happening and what is being recommended.
Make sure you actually understand what's being recommended. The key to a good adviser-client relationship is feeling confident and knowing that you can ask questions.
Some firms will have minimum investable assets that you need to have for getting advice, while others are more geared to those at the start of their journey. It's all about finding the business that's right for you.
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