So, what is financial planning?

There is a plethora of financial institutions to choose from when looking for financial advice which range from the leading Banks and Building Societies to local Independent Financial Advisers.  However, do they really give financial planning advice or are they only interested in selling you a policy or plan?  This is a question that you need answered before you can feel comfortable with the advice being proposed.  To help you, I have extracted an explanation from the Institute of Financial Planning's website which, I believe, gives you an insight into what financial planning really is (Source: 08/09/09).

What is financial planning?   'Financial Planning is the process of developing strategies to help you manage your financial affairs so you can build wealth, enjoy life and achieve financial security. Whether this is taking some simple steps yourself to seeking professional help, Financial Planning is an effective way of ensuring you are fulfilling your life ambitions without having to worry about your finances'
What are Financial Planners?

'The role of a qualified professional Financial Planner is to look at all aspects of your lifestyle, goals and requirements and develop a financial strategy suitable for you. Make sure you are receiving the best financial advice and search for a Certified Financial Planner (CFP) professional. A CFP professional is someone you can trust and know has completed a high level of qualification'.
It should be noted that there are no references to any financial products or services, just how financial planning advice should be tailored to individual needs and aspirations.

I adopt the same four stage process for all new and existing Clients:

Stage 1 - I work with each client to understand their current circumstances and future hopes, aspirations and goals both for themselves and for their family and/or business.
Stage 2 - I obtain comprehensive details of each of my client's current financial circumstances and arrangements.
Stage 3 - I analyse the information I have collected to ascertain any shortfalls and/or surpluses.
Stage 4 - I produce a tailored financial planning report that qualifies and quantifies our findings and suggests suitable courses of action to deal with any shortfalls and/or surpluses identified.   

There may then be a fifth stage in the process - Stage 5 is where my clients ask me to arrange the most suitable financial products and/or services to meet their needs.  These could be in answer to a protection, investment, retirement or tax-planning need.  This final stage may attract a service  fee which, should it be in my client's best interests, could be reduced by the amount of any commission that may be paid.  This is agreed on an individual basis as some of my clients prefer to pay a fee for my advisory services.  The result here is that even this stage is tailored to my client's needs

The object of the four or five stage exercise is to always deliver high quality, professional, unbiased financial planning advice.

So, in conclusion, financial planning is not about selling plans and policies, it is all about understanding your financial goals and plotting a route through the financial maze to help you achieve those goals.

Information provided by our Financial Planning Expert - Clive Barwell -