What are people paying for when they seek out a financial planner? What are the key roles of a financial planner and which aspects of this relationship add value? The real answers to those questions may surprise you.
But is that really the main benefit they deliver to consumers? You may want to think about this differently. For example, when you seek out a car mechanic, what are you paying for? Brake and transmission diagnosis and repair? Auto-electrical maintenance? Collision repair? Cooling systems replacement?
What most people want from automotive services is a car that gets them safely, reliably and efficiently from Point A to Point B. They want the car serviced in good time, they want a fair estimate of what it will cost, an itemised bill and a guarantee on parts and repairs.
Likewise, the value of a good financial planner – at least in the eyes of most clients – will often differ from the advertised services. To be sure, asset allocation and portfolio advice are important components, but these are just means to desired ends.
What people are paying for, in the final analysis, is guidance to a goal, peace of mind, a sense of security, a feeling that someone has their back and an assurance that they will be okay whatever the world throws at them. Furthermore, people value a sense of structure about their financial lives and an understanding of the choices at their disposal.
The technical tools that a financial planner employs – an understanding of what drives returns, the role of diversification, a knowledge of the tax system, the techniques in rebalancing portfolios – are without doubt critical components in delivering those desired outcomes. But they are only a part of what people are paying for.
In fact, a sound financial planner will play several pivotal roles for their clients, none of which are on the typical job description. Here are seven of them:
These seven roles are not exhaustive by any means. There are many others, but this gives you an idea of the depth and breadth of services a good financial planner will provide.
Again, to use our car mechanic metaphor, a financial planner is not simply trying to fix your car but is looking to ensure you and your family reach your desired destination safely and reliably while enjoying the journey along the way.
That is where the value lies.
We have offices in Edinburgh, Glasgow, Aberdeen, Perth and London. You can contact us at any of our offices, or by email.
Carbon Financial Partners Limited is authorised and regulated by the Financial Conduct Authority. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.
The Financial Conduct Authority does not regulate some forms of tax advice.
Registered in Scotland #SC386400.
Registered Office: 61 Manor Place, Edinburgh EH3 7EG, Scotland.
© Carbon Financial Partners 2023