Financial Planning - A Demo

Last week there I was having a chat with someone who, after very politely listening to me waffle on for thirty seconds or so, asked…

“So, what do you mean by financial planning anyway?”

It’s a very fair question. Financial advisers, wealth managers, financial planners, investment managers - for the average punter on the street, the financial services industry seems to be locked in a state of perpetual rebrand (or in a permanent identity crisis).

I call myself a financial planner because I believe that the number one determinant of financial success is having a plan in place. Full stop.

For it is only when you have built a plan that takes account of you and your family’s aspirations, that you can properly put in place a structure that sits on top and recommend products to power that plan to success.

This all sounds great, but what does it actually look like in practice?

Last week I began the process of drafting a financial plan for a lovely couple, in their early 40’s, who wanted some help to maximise their savings for retirement.

As you’ll see they are in a very robust financial position, but they had the feeling that they could maybe organise their affairs a bit better, be a bit more tax efficient and sweat their savings harder. Not uncommon.

The below video is an almost word for word replica of what I sent to them a couple of days ago (anonymised of course). This initial draft is only a starting point and will naturally be iterated on over time. But what we see here are the foundations of their plan for financial success being laid.

Financial planners have never had more access to better technology to bring what they do to life. And you will see that the software that I use in this video combines extensive amounts of historical data with a lot of pretty charts. Having access to these pieces of kit unquestionably represents a net positive for the consumer.

But there is real danger in assigning too much importance to what can only ever be an imperfect projection. Any implied certainty is an illusion.

Although, in my view, it is impossible to do the job properly without these tools or similar - the client always has to remember that their actual journey will inevitably look different, maybe even a lot different, in reality.

It is a little depressing that the plans that we produce have a limited shelf life. A perfectly sound plan today may become irrelevant in a week, because life happens. Reality demands that we become comfortable with imperfection, that we embrace the chaos.

But what we do know is that having some plan, however imperfect, is better than nothing.