Stay up to date


Gold Standard Advice – Part 3

This is part 3 of the ‘Gold Standard’ series. In part 1 I mentioned the Twitter conversation I read that talked about the key factors in providing ‘gold standard’ advice being an adviser who…

  • Is a Chartered Financial Planner
  • Is a Certified Financial Planner (CFP)
  • Practices ‘Lifestyle Financial Planning’
  • Uses an ‘evidence based’ approach to investment strategies

In this blog I will be exploring what is meant by ‘Lifestyle Financial Planning’, and what it means for the advice process.

Lifestyle Financial Planning

Lifestyle Financial Planning is the process of helping you to achieve and maintain financial independence without the fear of running out of money, whatever happens.

It’s about listening carefully and helping you to think about what’s really important to you. What do you really want to do with the rest of your life? What are your hopes, dreams and concerns? What do you want for your family? What does financial security, financial independence and peace of mind look like to you individually?

Once all of your goals and aspirations are known, Lifestyle Financial Planning moves on to looking at how to fulfil those goals using the financial resources available to you. Normally this involves using powerful financial planning software to establish exactly what you need to do to fulfil your dreams. It also enables us to look at the effect of different actions on your financial future and model different scenarios. From this, a strategy can be developed to ensure that you achieve everything you want in life without ever running out of money.

It is a dynamic and ongoing process that has nothing to do with recommending the best insurances, pensions or investments. It is all about making sure that you can organise your financial resources to create the life you want.

It sounds powerful, but it’s amazing how many advisers don’t do this. An example of this was a new client who appointed me to analyse their final salary pension. Both her and her partner were recently retired but they were struggling to meet their living costs and were actively looking for part-time work.

The frustrating thing for them was that they had an adviser (a Chartered Financial Planner) who had been appointed less than 9 months previous. He had done a thorough job of providing financial advice in reviewing their money purchase pensions and the partner’s final salary scheme, and had recommended a new contract for each of them along with a new investment approach. However, at no point had he shown them what their financial future looked like. As a result, they were worried and unsure as to how they could meet their income requirements both now and in the future.

As it turned out, rather than needing to go back to work, this couple never had to work again. In fact, Lifestyle Financial Planning showed them that, with a bit of restructuring of their finances, they could spend more on holidays and still never run out of money.

Without having done this, the clients may have needlessly wasted years of their lives working part-time in a job they didn’t want, or need, and worrying unnecessarily. Needless to say, the client now understands the importance of having an adviser who practices Lifestyle Financial Planning.

This is just one of the aspects that makes up the ‘gold standard’ for giving advice. But it’s so important. In my experience, an adviser can be Chartered and/or Certified (as shown above) and still not deliver a service that helps clients live a better life. Lifestyle Financial Planning guides the technical work and ensures that all decisions are made for the right reasons.

If you know of anyone who you think would benefit from Lifestyle Financial Planning, please do pass on our details or introduce them. Next week I will be explaining the final part of the ‘gold standard’ jigsaw.