The True Value of Financial Planning: A Personal Journey

As a financial planner, often I’m asked about the tangible benefits I bring to my clients. It’s a fair question, one that I’ve come to answer not just with numbers and reports but with personal experiences that underline the profound impact good financial advice can have on individuals and families.

Let’s start with the numbers. Numerous global studies attempt to quantify the financial difference advisors make, often settling around an added value of approximately 1.8% per year, as noted in reports by Morningstar, Cirano, and Vanguard. Over time, that can translate to nearly 30% more money to spend in retirement. 

While these figures are essential in understanding the economic aspect of financial planning, they only scratch the surface of the value I aim to provide. Let me share a personal experience that illustrates this.

A few years ago, one of my clients approached me with a concern. He felt that the fees he paid me were higher even than the financial contributions he was making towards his grandchild’s education. This sparked a journey of introspection and analysis on my part. I wanted to demonstrate, not just to him but to myself, the full extent of the value my services brought to his life.

We delved into his financial portfolio, uncovering layers of savings and fee optimisations that had a ripple effect far beyond what he initially perceived. Through tax-efficient structuring and strategic investment planning, we not only offset my fees but also generated a monthly surplus equivalent to 1.64% per year relative to his financial planning expenses.

However, the most impactful moment came when I was able to steer him away from what could have been a well-intentioned but financially imprudent decision. You see, my client was planning to fully fund university for his grandchildren and even buy them cars. His desire to be generous, while admirable, risked depleting his capital far earlier than planned. By providing a clear-eyed assessment of the long-term implications of his generosity on his financial security and that of his heirs, I helped him navigate a potential pitfall.

This experience encapsulates what I believe is the essence of financial planning beyond numbers and percentages. It’s about being a trusted advisor, and a sounding board for both financial and life decisions. Beyond that, quality financial advice encompasses everything from tax optimisation and withdrawal strategies to aligning investments with specific goals and timelines. The Cirano research found that investors who worked with an advisor for 4-6 years had 58% more in financial assets than their unadvised counterparts. And the longer the relationship, the greater the benefit. 

In conclusion, while the numbers quantify the value of financial planning, the real measure lies in the lives we touch, the decisions we guide, and the futures we secure. So, while it’s true that I don’t have a crystal ball for picking market-beating investments, the true value I provide lies in the holistic, personalised counsel that helps my clients achieve their dreams – now and in the future. It’s a privilege I’m honoured to fulfil.