Financial Planning – “avec ou sans” products

Those of you who are active on Twitter may well have noticed a fair amount of debate this weekend on how products fit in with the financial planning process. I think that it would be fair to say that in most cases the processes Paraplanners work with are set by their employers (or clients in the case of out-sourced). Our role often, but not always, involves a recommendation about a product. All too often it feels that this is a recommendation to acquire a new product, but this isn’t always the case and certainly shouldn’t be our mindset.

So why should we engage in this debate as Paraplanners? Primarily we should be engaged because we care about our clients! What we write, plan, explain, or suggest on a day-to-day basis has an impact on them. Without our clients we are just keeping desks warm, tea drunk, and biscuits dunked! So let’s keep them as numero uno and hold them, their objectives, wellbeing, and fulfilment at the heart of everything we are doing.

Secondly we need to step back and ask ourselves what does it mean to be a Paraplanner. The word literally means Para=”side-by-side” Planner=”someone who makes plans”. We work side by side with people who make [financial] plans. I accept that there is a huge diversity of what we do/do not do as Paraplanners in our individual businesses, but this is essentially what we do. This key term “Paraplanner” tells us that we should have an engagement/understanding of what it means to be a Financial Planner. So, yes we need to engage with the debate.

However what I think is far more important is that we start thinking with Financial Planning in mind rather than simply giving good financial advice. Paraplanners need to ‘get’ what Financial Planning really is and why it is important. The IFP put it really well on their consumer website (

“Financial Planning is an ongoing process to help you make sensible decisions about money that can help you achieve your goals in life; it’s not just about buying products like a pension or an ISA.”

This is about going beyond transactional advice about one aspect of a client’s life (e.g. life insurance needs). This is about taking an all in big picture view of what the client wants out of life. Financial Planning is not solely about ‘financial prudence’, but is about looking deeper to our client’s big goals. Very few people would express their life goal as ‘to achieve capital growth over the medium to long term’, but they might well say ‘I want to know that my family is secure, be in a financial position to follow my dream of travelling on the Orient Express, and have the funds to set my children on the property ladder when they are ready’.

Financial Planning is about looking at what you have got and bridging the gap between this and what you need to achieve your goals. This will involve the use of a variety of tools including cash flow modelling. The focus is on the goal and not the product. However it would be fair to say that in most scenarios (such as the above) it would be necessary to have some kind of product(s) involved to achieve it. We need to explain what the product is and be thorough in our due diligence, but let’s not forget that the financial plan is the bit that needs to happen first.

My view is that the financial plan, and the products which enable it to be implemented, are interlinked. I would liken it to a car. The engine (product) is what gets you from A to B or breaks and gets you stuck in the middle of nowhere! However the engine doesn’t determine where you go – it’s just a grunt merchant. What determines where you go with a car is the steering wheel (financial plan). The steering wheel provides direction, but on its own you are not going anywhere. In the same way as we need steering wheels and engines we need to have a financial plan in place as well as products. We might find that the car we have is enough to get us where we are going, but as time goes on we might need something different.

On Saturday morning we [The ParaHub] asked our Twitter followers what people thought about this and had a couple of great responses that you might find interesting.

Christina Georgiou says:

“it’s possible to prepare a plan using no products. But not possible to implement it without them. That’s my twopence worth!”

Matthew Walne says:

“not every financial plan requires a product, every product requires a financial plan beforehand”

It is my strongly held view that Paraplanners need to understand what Financial Planning is to really be effective and succeed. There is some excellent support out there and the exam routes from both the IFP and PFS cover this off. Why not book on to the IFP Paraplanner Conference or ask questions via The Hub forum. There are many Paraplanners who are willing to share their ‘Lightbulb moment’ when they truly understood the value of this approach and want you to get it too. One of my favourite things about being a Paraplanner is the community of people who are willing to share, encourage, and support each other; Paraplanners are special.

I’ll leave you with this stirring quote from Paul Armson at Inspiring Advisers. I think he hits the nail on the head about what the heart of financial planning is. The products we recommend are just the tools of the trade. We don’t admire the artist’s paintbrush – we care about the picture! Let’s make sure we focus on the picture and not just our paintbrushes!

“I believe it is every Financial Adviser’s responsibility, to tell their clients the REAL ‘Truth About Money’. The ‘Truth About Money’ has nothing to do with financial products. It has everything to do with ensuring that clients can live the life they want without fear of ever running out of money – or dying with too much! Sadly, because of their product and investment focus, most financial advisers fail to tell their clients what they need to know most. Together we can change this.”

Paul Armson, Inspiring Advisers

This article first appeared on The ParaHub in March 2015.

This content is intended for Paraplanners and does not constitute Financial Advice. If you require Financial Advice please contact a Financial Advice company such as my employer EQ Investors.

About Dan Atkinson

A Paraplanner at EQ Investors since August 2010, Dan’s Music Technology degree helps him approach Financial Planning problems creatively. IFP Paraplanner of the Year 2014 and member of the PFS Paraplanner Practitioner Panel, Dan is working towards Chartered status and recently became a CISI Accredited Paraplanner. Dan is also involved in youth work at his local Church in Hatfield.

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