Why financial planning adds value to your clients

male hand pointing at business document

Each year, Financial Planning Week aims to raise the profile of the profession and its standards. The Chartered Institute for Securities and Investment (CISI) event is designed to encourage individuals and families to engage with a financial planner, and to demonstrate the many benefits of seeking professional advice.

This year’s event runs from 11 to 17 October 2021. If you have clients that would benefit from advice, it’s a great opportunity to raise the issue with them – and we’re happy to answer any questions they might have.

What is financial planning?

In simple terms, financial planning is a professional service designed for individuals, their families, and businesses. It’s ideal for people who need objective assistance in organising their financial affairs to achieve their financial and lifestyle objectives more readily.

A question that clients often ask us is: “what’s the difference between financial advice and financial planning?”

While objectively they may seem the same, there are key differences. Financial advice typically solves an immediate problem – for example, a client may want to invest a lump sum, arrange some life insurance, or start a pension.

Financial advice is typically transaction-based, and often a one-off service with perhaps some annual reviews if the client has invested money.

Financial planning is much more geared towards a client’s aims and objectives. As financial planners, we begin by establishing exactly what it is the client wants from their life. It might be to retire early, to travel in their post-work years, to provide financial assistance to their children, and so on.

By focusing on these goals, we can create a financial plan that will help a client to achieve their life ambitions – whatever they might be. We’ll also meet with a client regularly to ensure they remain on track.

Here’s a great way of differentiating the two approaches.

If the first question a person asks your client is about their money, they are probably a financial adviser.

If the first question a person asks your client is about their life, they are probably a financial planner.

The value of financial planning

One of the common objections that your clients may have about financial planning is that “they don’t need it” or “they can just do it themselves”.

Over the years, many pieces of research have highlighted the value of financial planning both from a tangible, monetary perspective but also due to the peace of mind it can provide.

Let’s start with the pounds and pence. In 2019, the International Longevity Centre (ILC) published updated research which showed:

  • Receiving professional financial advice between 2001 and 2006 resulted in a total boost to wealth (in pensions and financial assets) of £47,706 in 2014/16
  • Fostering an ongoing relationship with a financial adviser leads to better financial outcomes. Those who reported receiving advice at both time points in the analysis (around a decade apart) had nearly 50% higher average pension wealth than those only advised at the start.

So, in simple terms, working with a financial planner can boost your clients’ wealth.

However, when we ask clients why they use BlueSKY, increased wealth rarely comes up. Clients consistently tell us that the benefits of working with BlueSKY are:

  • Peace of mind – clients really appreciate having a financial expert they can trust
  • Understanding and clarity – clients feel in control of their future
  • Security – reducing concern and helping clients to sleep at night!
  • Expertise – clients are reassured that they have a qualified professional helping them to achieve their goals.

A 2020 Royal London study backs up these findings. It concluded that clients who worked with a financial planner said that they were more in control of their money, felt more secure and stable, more confident, and better prepared to cope with life’s shocks.

Source: Royal London

Financial Planning Week is a great time to talk to your clients about planning

Financial planning adds value to clients. So, this Financial Planning Week is a great opportunity to talk to your clients about the benefits that good quality planning can offer.

Whether your client wants to sell their business, retire early, protect their family, manage an inheritance, or understand the financial implications of a divorce, we can help.

Whatever questions your clients have, we’ll be happy to answer them. And, once we’ve established that we can help your client, an initial meeting is always at our expense with absolutely no obligation.

If you have clients who would benefit from Chartered financial planning, please get in touch. Email info@blueskyifas.co.uk or call us on 01189 876655.