As a Certified Financial Planner® and member of the Financial Planning Institute of Southern Africa I subscribe to the international Financial Planning Standards Board’s 6-step process to financial planning.
The second step in this process is to “collect the client’s information”. We are expected to:
- identify the client’s personal and financial objectives, needs and priorities
that are relevant to the scope of the engagement and
- collect sufficient quantitative and qualitative information and documents about the client relevant to the scope of the engagement
before making and/or implementing any recommendations.
Collecting information is like stripping naked
Sometimes the prospect of being subjected to a financial examination can have clients feeling like they will need to strip naked in front of a relative stranger and bare their financial souls. This can be a rather terrifying prospect.
Taboo secrets and sins
To some people, talking about money is even more of a taboo subject than sex, religion, or politics. There are few things in life we are more uncomfortable than exposing and sharing our deep dark secrets and sins about money.
Gathering the information
In order to be able to make appropriate recommendations to the client we need to properly analyse their financial situation; their financial needs,objectives and circumstances; their risk profile and their financial product experience.
There are a number of responses which clients have experienced when faced with the process of gathering the information and presenting it to the adviser.
- Clients can feel embarrassed that they do not have all their financial affairs “in order” and all their documents at hand
- Clients can feel embarrassed that they do not fully understand what is being asked of them and fear that they will give the “wrong” answers
- Clients can feel embarrassed about their financial situation – the values of their assets and liabilities or their income and expenditure
- Clients can feel that their financial needs are “out of line” with their peers
- Clients can feel that they “don’t have enough money” for the adviser to bother with them
- Clients can be afraid to ask for help
There are many other ways in which the process of getting naked in front of an adviser can seem like an incredibly daunting experience.
Sometimes we have found that just making a start is a great way to start. Clients can arrive with a bag or box of papers, statements, slips, certificates and the like and the first thing that we do is work with them to “get organised”. We work with the client to identify assets and liabilities and to take stock of income and expenditure over time. During this process the necessary information is obtained or revealed and then we can start to analyse and make recommendations.
Everybody is different and it’s no competition
The financial affairs of our clients are confidential and sacrosanct. As advisers we see people from all walks of life and across the full spectrum of wealth. It’s not a competition to us to see how rich or poor our clients are. All we want to do is help our clients to put in place a plan to try to meet their financial and lifestyle needs with what they have. Sometimes this will be harder for the client to do and sometimes it is easier. Either way, as advisers we relish the opportunity to help and sometimes we can find great reward in assisting needy clients to meet their goals.
Don’t be afraid
If you are worried about getting financially naked in front of a professional financial adviser: don’t be. We are there to help.