By Craig Kiggen
YPO Member Since 2007
I cannot remember how many times a fellow business leader has commented to me that, at some point, they have had a broker or financial planner hound them for an appointment. Many have admitted to just putting them off or not taking their calls because quite often they just can’t reconcile what value a financial planner will add to their lives.
Interestingly, this hotly debated topic has also been on the regulator’s radar for a while now and, along with growing calls from consumers, has started pushing financial services companies to rethink their business models if they are going to survive in a world where consumers are more informed and cost aware than they were in the past.
I often get asked the following questions:
- What is the value a financial planner adds to a client’s portfolio?
- How do I justify the fees that a planner charges, especially after the plan has been implemented?
As a financial planner, key individual and regional head of Citadel Wealth Management, one of South Africa’s largest wealth management businesses, one would expect me to mostly be on the side of the financial planner in the argument. However, I am more sympathetic to the regulators and clients’ perspective than I “theoretically” should be. I personally believe there are just too many financial planners in the industry who are not adding any value to their clients lives and, if they were pushed, would battle to justify the fees that they are charging. We see this across the board with new clients who come to discuss their finances.
However, when a client is working with a financial planner who truly understands their needs, who is able to walk beside them and guide them through the many financial pot holes in the road of life, a financial planner then begins to add the value their clients are paying for.
Further, by virtue of their roles, business leaders are busy people who focus the majority of their attention on creating value for shareholders of the business—they largely neglect their own personal financial situation. A good financial planner can add an enormous value if an individual looks at their financial planner as their “personal financial director” who is rewarded for successfully managing and protecting the investable assets of the individual.
When you are considering if you are getting value from your financial planner, ask yourself the following questions:
- Are you comfortable that your planner is helping you navigate the path to your financial success? How is this being measured?
- Does your financial planner have a sufficiently large network to be able to bring the appropriate expert to your aid when needed?
- Does your financial planner have sufficient support, from an infrastructure perspective to provide you with sound ongoing advice?
Although there are many more questions that should be asked, this is a starting point, if the answer is “No” to any of these questions, you may want to consider what you are paying for.