What To Expect When Working With Your Financial Advisor

What To Expect When Working With Your Financial Advisor

This week’s podcast – our 100th edition – looks at what to expect when you meet your financial advisor, with Craig Skelton and Jamie Benn.

What’s the first step to get financial advice?

First, make contact with us and get a time in the diary. We’ll need a good amount of time to chat, so we’re not limited on what we can talk about and your advisor can get all the information I need.

Information is one of the standout parts of the process. The more information you can give your financial advisor, the better. That could be detailed information on what’s happened in the past plus your aims and objectives, so we can understand what you’re looking for.

We’ll also agree what documents we need to see and any other information to share. We might be looking at pension plans from years ago, for example. It’s a deep dive process, led by what you’ve done and what you’re looking to do.

How long does the first appointment last?

I’d say somewhere between an hour and ninety minutes. If it’s somebody that’s very new to this, who doesn’t have much idea as to what their existing finances are, possibly even longer. Up to two and a half hours isn’t uncommon if there’s a lot for us to get through.

Every client is different. Some don’t need anything in terms of additional information. Others really like to dive down into the details of everything. But rather than having longer appointments, I try to split it down into separate sessions. It can be a lot for a client to take on. It’s sometimes better to both get rough information in a first appointment, then leave with a little bit of knowledge. In the next appointment, we figure out how well I explained things and if there’s anything we need to go over again.

What will we talk about in those first appointments for financial advice?

There’s a few different areas of focus. We’re obviously discussing what your aims and objectives are, how achievable they are and the steps to take on the way. We break it down into a few different areas.

In terms of different types of financial advice, looking at pensions is obviously a big one that people contact us about. That might be locating old pensions, amalgamating different funds or just trying to understand what pension paperwork they receive means.

We also look at tax. Tax efficiency is a great way for us to get money back for clients. We cover that off and look at whether people are using their dividends allowance, their inheritance tax situation, or whether they’ve got any capital gains tax allowance that we could potentially utilise.

We look into inheritance tax in detail, whether that’s potential inheritance tax in your family or your own estate, and we’ll do a lot of tax planning for your investments and pensions.

A further area is mortgages. We talk about your situation, whether you have Buy to Let property, anything that we need to just consider as an income bringer or straight expenses.
The investment side of our services is more detailed, and depends on what the client situation is. They’re going to be the key points we will go through. The rest is led by your own preferences and aims.

Will I have to go into lots of personal details?

Seeing a financial advisor for the first time can make you a little apprehensive. But this is all about your aims and goals. You might be a bit nervous. You’ll find, though, that as the discussion continues you will feel more relaxed and able to talk about any personal information. Everything you say is completely confidential.

An important part of the conversation is to help us establish something called ATR in financial jargon, or Attitude to Risk.

It’s how the FCA has decided is the fairest and most accurate way for us to ascertain how you feel about the risk that you’re taking with your money when you invest it in stocks and shares. It varies from ‘very cautious,’ where we would limit any risk or to minimise any fluctuation in the value of your portfolio, to ‘speculative’ which is quite the opposite. As a speculative investor, if the balance hasn’t gone flying up one week and flying down the next week, the investor will be disappointed – they’re expecting a bit of a rollercoaster.

It’s important to understand this early on. If your aims require a large amount of growth but you have a really cautious attitude to risk, we might need to take a step back. We would need to make you aware that you might not be able to reach your goals.

You might either have to increase the investment amount or look at a different area of the market. And the same goes in reverse – we don’t want to take on too much risk if you really don’t need to.

What happens after the appointment?

Sometimes clients decide to do some homework. I try to give them a list of easy reading and documents to work – not books on tax and stocks! It’s always good to leave the client with some things to at least contemplate and consider.

On my side, I usually have a lot of research to do. It’s all about drilling down into the documents and information we receive from the client and sense checking everything.
We’re making a plan for somebody’s entire life. People can see how difficult that is and how our financial knowledge helps.

But unless I have the personal knowledge about that client I might not understand enough about the situation. I make sure I get a full insight into what they want, while you get a good understanding of what the market’s like, exactly what we’re suggesting and why. That gives you a better mindset moving forward. You have aims and objectives, and now the stepping stones to achieve them.

What’s next after the research phase?

By this point, you’ve had me visiting your home, taking a few cups of coffee off your hands, talking through what’s going on in your life and then I’ve left.

From there we meet back up and talk through a few things. Firstly, what I’ve been doing in my research, looking at timings and figures, and any focus on different areas.

Then it’s all about presenting my advice on the best route to meet your aims and objectives. As long as we’ve done the first part right, and you’ve given me as much information you can, I should have the answer you’re looking for.

We’ll have an open conversation, where you can ask as many questions as you like to make sure we have everything we need to agree on the next steps. That’s when we start to move into the implementation stage and put some actions in place.

Is it OK to ask stupid questions?

As human beings, especially talking about things like finances, aims and goals, none of us wants to look stupid. We might say that we understand things, but actually we don’t. We might have questions in our heads that we don’t ask.

But it’s important to lose those inhibitions so that you really understand what’s being set up and how it might help you achieve your future plans.

There’s no judgement at all. As advisors we can spot the occasional awkward look between spouses, and take a step back and cover things again. It really helps to build a good relationship. I know my clients’ lives and often they ask about mine. I’m more than happy to talk through what’s going on in my life, my aims and things – and that personal approach helps to air questions you might think of.

In fact, I take it as a real win when clients are willing to ask questions. There are many things that you can’t be expected to know.

What happens post-implementation?

Once we’ve set up the agreed investments, pensions or other financial solutions, there’s usually a bit of a gap before we speak again. But we will have a meeting at least once a year to catch up, analyse the aims and objectives and how we’re doing towards achieving them.

We also pick up with you on a much more regular basis by text or email – just dropping in to check nothing has changed. With a lot of clients, you get to know them so well and they get to understand your life as well. We automatically catch up on points of interest, whether it’s Wimbledon or what’s happening in the market.

Clients are welcome to contact me any time, 24/7 to ask questions or check any details. We always look to create long-lasting relationships that grow over time.