March 2012 - Page 3 of 3 - Financial Planning in Wimbledon

2010: The Big Picture – Eric Lartigau

I was recently asked what the difference is between an IFA (Independent Financial Adviser) and a Financial Planner (who is also independent). The truth is that those now operating as financial planners used to regard themselves as IFAs, however as our profession has moved on and technology has greatly improved, a financial planner is someone that first of all creates a long-term cash-flow plan. This is something that a number of us have been doing for some time, but only in the last few years has there been any half-decent software that enables this process to be presented.

As a result, a financial planner is finding out what your goals and aspirations are, what lifestyle you want. It is not about the money, but about the lifestyle. The financial products are very much a secondary part of the relationship – but still important and most financial planners will continue to implement and manage the financial products, but this is a result of the plan, not an objective at the outset.

I’m conscious that I have not described this as clearly as I might, that’s probably due to the fact that as a financial planner, I continue to wear my IFA hat to arrange products to take advantage of the tax system and so on, but primarily creating the financial plan is where my focus is initially. All elements of the piece come together and need reviewing, but it is the financial plan upon which everything else hangs. Those of us that now regard ourselves as financial planners, work to a six step plan, a financial planning world standard ISO22222.

1. Establish your short, medium and long term goals in life

2. Gather your financial data

3. Analyse and evaluate your financial status

4. Develop your plan

5. Implement your plan

6. Monitor your plan and make adjustments where necessary to keep on track

This is something that we have been doing at Solomons, but we are constantly developing and improving the “what” and “how”, but our “why” has never altered. I believe that having control of your finances enables you to enjoy a genuine sense of freedom and peace of mind. The additional benefits are numerous, from having more time to do what matters most to simply enjoying the time you have with those you care about.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

The Money Machine

1997: Breakdown – Jonathan Mostow

Financial planners are sometimes confused with magicians – in truth there is nothing magical about financial planning, though some people certainly approach money as though it was. The principles of sound financial management boil down to generating income and keeping costs below income levels. Long-term planning is essentially ensuring that there is sufficient income to meet costs without having to “work”. Most of us have resources that enable us to find work and earn a living, however when times are more challenging, as they are now, thoughts are often directed to the money machine.

If you were hoping that I was going to point you in the direction of the nearest money machine, I’m afraid that there is no such thing. You are “it”. Your own personal skill set and capacity to think will require your creative endeavours to “go forth and earn”. Some people are not able to do this, because they lack the ability to see their resources, understand them and in some instances may have no resources at all. Those wishing to see their resources need to reflect on how to best employ them. This is not a straight-forward problem, but one that starts with the end in mind. How much is needed and over what time (which is a diminishing resource for us all). Many financial advisers seem unable to do this for themselves and so I would question their ability to do so for their clients. I believe that this is because the thinking required goes beyond the simple needs of today and must be based upon a larger picture, one that is built upon personal values. This is where expert financial planning reaps benefits.

Of course if you are the money machine (you physically go out to earn a living) then it would make a lot of sense, unless you have ample resources, to insure yourself against breakdown – you would do so for your car and house and probably a pet, yet a significant number of people do not properly insure themselves – their ability to earn. This is one of the very first steps of any good financial plan. Sadly once the machine breaks down, there is no chance of taking out insurance. So make sure that you have the proper level of cover. Hopefully your cash machine won’t ever break down, but if it does, you will have ensured that your finances and lifestyle do not become casualties. Its bad enough when the mundane things break, as my boiler did the other week – but when the thing that breaks is you, the size of the problem is significantly more problematic than a lack of hot water.

IFA v Financial Planner

The Money Machine