Real-Life Communication
When you get right down to it, the role of a financial planner is
to give advice on financial matters.
Not every client gets the same
advice, however. That's because everyone is different, and likewise, everyone's
financial position is different. Before a financial planner gives advice to
a client, they have to assess the client's current financial position, as
well as the client's financial goals.
Once that's done, the financial
planner may give a range of advice, depending on the client's unique needs.
For instance, the planner might advise the person to pay off debts, consolidate
loans, enroll in an automatic savings program or make investments.
Often,
the financial planner will give advice about what kind of investments to make.
Before they do so, the planner has to know what kind of person their client
is. Is the client aggressive and willing to take financial risks in hopes
of big returns? Or is the client more interested in security and slow-but-steady
growth?
It's safe to say everyone wants to be well off financially.
Often, it falls to the financial planner to put this into a realistic picture.
Sometimes it's difficult to explain that get-rich-quick schemes are not the
best choice, notes John Mallet, a planner. The slow and steady route is the
best way to generate wealth.
You're a financial planner. You get a
phone call from someone who wants advice about buying a house. You set up
an appointment with your new client.
Before you can give advice to
the client about buying a house you have to know two important things about
the client: their financial position and their financial goals.
Before
the appointment, you make a point-form list of all the information you require
in order to advise them properly.
For example, regarding their financial
position, you will have to conduct a "personal financial analysis." This includes
two main areas: assets and liabilities. What kinds of things are included
in each? What else do you need to know about your client?
As for goals,
you've been told that the client wants to buy a house. But the client might
have other goals that they've forgotten about, like taking a big trip. What
other goals might someone have? Make a list so you can jog the client's memory.
Make
your list.