City thinking, local knowledge

Why even financial planners need financial planners

By Questa Chartered

You may find it surprising to learn that even financial planners use financial planners. Surely, they know it all already, don’t they? Don’t they just follow their own advice?

Let’s look at why advisers sometimes find it helpful to sit on the opposite side of the desk.

To clarify goals

Setting clear goals is hard, no matter who the person is! If you’re doing it on your own, it’s all too easy to set vague objectives that don’t really challenge you. After all, who will know, or care, if you reach them? You can also easily let the timeframe drift – one year, five years, never.

Another independent professional, however, will bring your goals into sharp focus and make sure you really consider the level of risk and the possibility of failure. But they’re also likely to push you a bit and encourage you to commit to challenges that you might never have even considered if left to your own devices.

Goals are also likely to involve other people; spouses and families. So financial planners can often welcome using someone experienced in facilitating these discussions, just as they moderate them for their clients.

To be held accountable

Just being aware that someone is going to review your progress on a regular basis means you’re more likely to take it seriously. It’s human nature. Think back to school when you had to present something in class, or if a parents’ evening was looming. Or at work when a project is going to be analysed in a meeting.

It’s invaluable to know that a third party is going to review your goals. Knowing you’re accountable to someone keeps you on track and helps performance. It’s also useful to know there’s someone reminding you of what you deemed important at the outset.

To stop emotions getting in the way

No matter how qualified an adviser may be, when it’s their own situation it can be difficult not to get too close but to stay detached. Doing the financial stuff may be relatively easy for them; it’s what they’ve trained for and become qualified in. The harder part can be making sure they don’t get emotionally involved in their own investment decisions, which is where having an independent third party can be invaluable.

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