What is a financial planner? It’s the most common ...
What is a financial planner? It’s the most common question I’m asked. If you ask Wikipedia, a financial planner is ‘a professional who prepares financial plans for people’, which is akin to saying a concreter is a ‘professional who prepares concrete for people’. Not particularly informative.
Before I go any further, bear in mind that before anything else, a financial planner should have a high level of technical knowledge and expertise about all aspects of managing personal finances.

Without this, a planner can have the best intentions in the world, but the reality is they won’t be able to provide clients with the quality advice they need.  However as is often the case in life, having a wealth of information and being able to use it to effect lasting change for people, are very different things.

Every client is different, with unique financial circumstances and goals. With this in mind a financial planner must take on many different roles,  to deliver a tailored and considered approach for individual clients.

Personal trainer.

Everyone knows the way to achieve a long-term goal is to start with a single step today.

Yet in Australia alone, people spend over $30 million a year on fitness professionals to keep them accountable to the fundamentals of regular exercise, eating well and getting enough sleep. Similarly, financial planning begins with the fundamentals of spending less than you earn and saving money for the future.

Most people know these steps but avoid them because they don’t have someone to keep them accountable.
In the same way that a personal trainer keeps you accountable for your physical wellbeing a financial planner can do the same for your financial security (minus the sore muscles and early mornings).


So we’ve established there are things we should do, but don’t.  What about the things we shouldn’t do, but do?

This is a little more complicated and takes some mastery of psychological analysis to understand.  Without getting bogged down in details, at the beginning of human development our brain was designed to keep us alive in a dangerous world (such as dealing with the perils of living with sabre-toothed tigers).

Despite having several million years to evolve, our brains are yet to shake this fight or flight instinct, which is not ideal when making long-term investment decisions.  This is where a financial advisor can help – providing insight and guidance to ensure you don’t react to those feelings of fight or flight in a way that undermines your long-term goals.

I think we can all agree that sometimes in life, we are our own worst enemy.

Life coach.

Many people arrive at their first appointment without any long-term goals in mind.

For some, setting long-term goals can feel like being asked to predict the future.  For others, the hectic pace of day-to-day life doesn’t leave much time for ‘navel gazing’.  This is especially noticeable for our ‘baby boomer’ clients. While younger people tend to be very clear and vocal about what they want, many of our clients have spent most of their adult life focused on helping others achieve their goals (e.g. their boss, spouse, kids etc).

Before we can put together a plan, the first step in our discussions with a new client is to discover what they really want out of life.

Project manager.

Once we’ve had some time on the proverbial couch discussing our feelings about the future… now what?  We get to the ‘nuts and bolts’ of preparing a clear and achievable financial plan.

Think of a project manager who uses a building plan to coordinate various inputs people to build a structure.  It takes a clear idea of the final product, strong technical knowledge and an ability to get multiple trades heading in the same direction. Similarly, a financial planner should help you achieve your goals by planning the key steps and bringing in the expertise of others to get a holistic result. This might include tax planning and estate planning so it’s important that your financial planner knows what your accountant and solicitor are doing on your behalf. 

Those are the most common roles we play but sometimes a client’s needs will differ even from appointment to appointment.  Our role in a situation is dependent on what our client needs at that moment in time.

Written by Dallas Davison.
Published by Dallas Davison. December 18, 2019