What is Financial Planning?

I may have done a blog on this subject before, but I’m going to continue coming back to it throughout my career because I think it is extremely important. Financial Services is a tough and very regulated industry because there are so many definitions of a financial advisor. Basically, the term financial advisor suggests the idea that the person will have your best interests in mind when they suggest their different services. The advisor should absolutely do this, but unfortunately, this is not always the case.

Due to pressures and incentives over the years, the industry has become a sales job. It always has been to a point, but it’s sad when an advisor talks a person into a small life insurance policy just because they don’t want to make the meeting a waste of their time. The commission drives them instead of actually helping the client. It doesn’t make the salesman a bad person. They have a family to feed just like the rest of us. I’ve been in interviews with these big firms and you can feel the pressure the advisors are under to produce.

What’s the solution? Stop being a financial advisor and become a financial planner! Yes, it’s the exact same job. You have to recruit prospects and get them to become clients for a commission or a fee, but as a planner, your emphasis is on helping the client reach a clearly-defined goal. Not only on getting the commission. Commissions will come as you do good work.

That’s what financial planning is to me. The client’s goal is what matters. Money is the tool that helps us reach the goal. The “small” client can become the “big” client if they stick with you and work toward their goals. Then you can actually develop a relationship with the client and their family. Larger firms have forgotten this, but it’s the foundation on which an independent advisor (like myself) builds his business.

When I first meet a client, I give them a piece of paper on which they write their goals. Depending on the service they purchase from me, these goals can be one year or 30 years from now when they retire. I don’t mean a numerical goal, such as $1 million, but an actual goal like going back to school or buying a dream home.

We have to make the goals realistic, but I am all for chasing dreams. As I told a client recently, I’m the guy who started a wheelchair hockey program in Eastern North Carolina and it lasted for 15 years. My team traveled all over the US and Canada playing hockey in wheelchairs…sounds kind of like a far-fetched goal doesn’t it? So why should you be afraid to share your goal with me? I won’t laugh. I actually want to see you achieve the dream! Of course, you’ll still have to do the work. I can only help you with the path, but I’m glad to join you on the journey!

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