How to choose a planner

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At a recent social gathering I met a lovely couple who, after the usual ‘what do you do?’, openly shared their retirement plans and decision to work with a financial planner after many years of managing their own finances. They were both smart, had a wealth of knowledge in their chosen vocation and spoke with such clarity and conviction on the issues relating to their industry. And, yet, it seemed ridiculous that they needed help making smart decisions about their money.

“Our very first meeting highlighted the blunders we had made collecting different investments over time with no game plan or, as we learned later, with no identifiable purpose. He [the adviser] took that pile of stuff and turned it into a plan.” The couple went on to say, “We assumed that what we did know was more important than what we didn’t know.”

In the same way it had taken them a lifetime to become confident in their own industry knowledge, the couple knew the adviser had also invested a lifetime to get to that same position. This was evident from the specific changes the adviser had recommended to maximise Centrelink benefits and minimise the amount of tax they were paying.

“More money in our pockets!”, they said with cheeky smiles on their faces. The couple created a position where their money would outlive them, as opposed to them outliving their money. This gave them a great deal of security and peace of mind to pursue their interests, instead of worrying about money.

“Maurice”, the couple said, “we walked away with a feeling of lightness, like the weight of the world had been lifted from our shoulders. We now have more time than ever to spend with each other, our children and grandchildren.”

In their case, the couple have progressed further than what they would have on their own – tangibly and non-tangibly. They described their adviser as having similar traits to those of a friend. “He meets with us every year, he listens, challenges our thinking and stops us from doing dumb things.”

In fact, personal finance is more personal than it is finance – a lot of decisions are emotional and feelings can be expensive. No matter how smart you are, you’re still human. You’ll still feel emotion around these incredibly important decisions, and to help you make the best decision possible, you may find it helps to work with someone who isn’t you.

Planning for your retirement is one of the most important financial decisions you will make in your lifetime. Whether you have a lot or little, it is just as important.

Finding a good adviser can take a long time, and you should consider meeting with more than one before you make a final decision. Instead of looking to work with someone to make decisions for you, I would suggest finding someone with knowledge, who has your best interests at heart and who can provide a check and balance to your decisions.

Personally, I believe the best advisers have the ability to ask great questions – tough and thought-provoking questions, even questions that may make you uncomfortable – and then shut up and listen. This fast tracks their ability to understand about what you care about and provide relevant solutions.

So, how do you find someone like this? It’s not easy, but it’s worth it. Unfortunately, this industry makes it difficult to understand who does what. So you need to determine whether you are working with a salesperson or an adviser. Salespeople have their interests tied to their product or company – that is, you wouldn’t expect a Ford salesperson to sell you a Holden.

On the other hand, an advisor puts your interests ahead of their own. If you have any doubts, have an open conversation. Ask them about conflicts of interest. Ask them how they get paid. In fact, two questions you should ask are:

  • How much do I pay you?
  • Do you get paid anything from anyone other than me as a result of our relationship or the products I buy from you?

What you’re trying to understand is: Was that the best product for me or was that product recommended because it gave a higher commission, a bonus or a free trip?

You see, advisers are either paid a commission, a fee or a combination of both, which may be deducted from your bank account or from the recommended product. Of course, you should have a clear understanding of what you will receive – a mutual expectation. You need to take a close look at your plan and investments periodically, and make sure they match your goals.

Remember, this is not a fool proof way to find someone you can trust, but having these kinds of conversations will put you in a better place to carefully evaluate the nature of your relationship and act accordingly. Uncovering a potential conflict or determining that the adviser gets paid a commission doesn’t automatically mean it’s something bad – it’s just very important to know about it.

Maurice Patane has been a financial planner for over 25 years. His experience has shown him that many Australians are not living the lives of which they dream, which is often due to poor financial decisions. Maurice is dedicated to helping everyday Australians take control of their financial future, so that they no longer have to worry about money.

If you have a question or Maurice, please email [email protected].

Written by Maurice Patane



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