Are You With The Right Wealth Planner? Here’s A Checklist Of 5 Things Your Wealth Planner Should Be Doing For You

Most people realise the importance of saving to meet their long-term financial goals. The top priorities usually include setting aside adequate sums for retirement, financing your children’s education, or accumulating an amount that is sufficient to make the down-payment on your new house.

However, meeting all these goals is not easy. That’s because many individuals manage their finances in a haphazard way. When they have extra funds, they invest them without thinking about the long-term implications. Subsequently, they may need to liquidate their investments in a manner that gives them sub-optimal returns or even results in a loss.

How can you prevent this from happening to you? If you retain the services of a competent wealth planner, you can avoid making this sort of mistake. In fact, the knowledge and expertise that this individual provides can help you in several ways. These include:

• Helping you to define your goals and providing information on the best way in which to achieve them.
• Ensuring that your money works hard for you and is available when you need it.
• Devising a financial plan that takes your individual needs into account and assisting you to make corrections in the plan if the need arises.

But how exactly will a wealth planner do this? What are the steps that you should take to safeguard your interests and secure your financial future?

If your wealth planner’s approach is broadly along the lines of the five points described below, you will know that you are in safe hands.

1. Getting a grip on your profile

A wealth planner’s job is not restricted to informing you of the benefits of a new financial product or describing how much you will earn over a period of time. While this is important, there are many other aspects that need to be addressed.

Mon Chao, a highly accomplished wealth planner says that it is crucial to “Get to know the client, which includes understanding their financial situation, their life situation, their needs, wants, greatest concerns (kids, wife, other dependents) and fears (falling ill, clearing debt) etc.”

If the wealth planner approaches a client as a friend, it is more likely that a relationship of trust will develop. This can prove very beneficial in the long run.

2. Understanding your financial situation

A good wealth planner will begin by coming to grips with your individual details. The information that you will be asked to provide will include:

• What are your current investments?
• How long have you been holding them?
• Are you prepared for emergencies? Do your insurance policies take care of the worst-case scenario?
• What are the returns that you have been making so far?

After gaining this basic understanding, the wealth planner will be in a position to offer advice that is tailored to your needs. Beware of someone who begins the conversation by pushing a financial product without first getting to know whether you really require it or not.

Mon Chao explains, “Hard facts and figures should be obtained… to provide a viable and sound recommendation that suits the client’s needs. Quality information ensues quality recommendation.”

3. Your current policy summary

You will probably be asked to provide information about the insurance policies that you hold. What are the risks that are covered and how much payout are you entitled to?

But a skilled wealth planner will go beyond these numbers. Even if your insurance coverage is adequate, you may be paying too much.

According to Chao, “Sometimes, a client is covered comprehensively, but their insurance dollars are no longer cost-effective as the plans are outdated. This is not uncommon as insurers come out with better plans year on year as the market is so competitive.”

You could even be over-insured. This normally happens when a person is in his or her 50s or 60s. By this stage, you could have accumulated adequate funds to take care of most contingencies.

However, it is critical to conduct a detailed exercise to understand your requirements and the type of cover that you have. That’s where a wealth planner’s expertise can come into use.

4. Portfolio optimisation

This is the next step. Your wealth planner will analyse whether each dollar that you are paying towards insurance premium is providing an adequate level of benefit.

At times, people hold multiple policies. There is a duplication of coverage. In situations like these, it may make sense to eliminate some policies and enhance the coverage of others.

Your wealth manager will conduct an “audit” of where you currently stand. You may have bought a policy many years ago. The benefit that this provides could be grossly insufficient when compared to your current requirements.

Most individuals have constantly changing needs. While there may not be much of a change over a few months or even years, your profile may be very different in five or ten years. It’s always a good idea to review your portfolio and take corrective steps at an early date.

5. Is your wealth planner there when required?

When you are being sold a financial product, you may receive a very high degree of attention. But what is the situation when you make a claim? Is it easy to contact your wealth planner at this time?

“A good consultant makes you feel comfortable and assures you that they will always have your back,” says Chao.

A common complaint that one hears is that a consultant is not there when needed most. But that’s not true for the best wealth planners.

In fact, many clients turn to their wealth planner even for matters that are not directly related to their area of expertise. A customer may require advice on tax or legal issues.

Of course, the wealth planner cannot provide detailed information regarding these topics. But you can definitely hope to receive inputs that are of help and which guide you in approaching the right person.

More than just financial advice

Your investments are only a means to an end. Ultimately, your objective is to have enough money to meet your goals. Your wealth planner can play a role in helping you to achieve this.

It is a good idea not to restrict yourself to seeking only financial advice. Chao says, “Nowadays, I like to introduce myself as a life planner rather than a financial planner because I have noticed that my clients actually approach me for advice on other aspects of their life planning in addition to their financial planning needs.”

ZUU Investment Disclaimer: The information given above is based on our experts’ field of expertise and their own personal experience, and should not be relied on or construed as financial advice. ZUU online recommends that our readers take these pieces of advice as a starting point, to research and then assess the merits of this advice based on their own financial needs, investment goals, and risk tolerance.