1 year ago

Blue Chip Issue 83

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Blue Chip Journal is the official publication of the Financial Planning Institute of Southern Africa NPC (FPI), effective from the January 2020 edition. Blue Chip is a quarterly journal for the financial planning industry. Blue Chip publishes contributions from FPI and other leading industry figures, covering all aspects of the financial planning industry. Visit Blue Chip Digital:


BLUE CHIP FINANCIAL PLANNING The Future of Financial Planning: getting clients to understand that money can be a friend or foe My journey as a financial planner began some 28 years ago. Beginning as a part-time advisor and learning the ropes, after four years I decided to join a corporate as a full-time advisor. During this time, I went through rigorous training and grew from advisor to executive financial advisor and obtained my CFP®. Through consulting and engaging with clients it became evident that the clients I saw wanted and needed more than to be sold financial products. The more I increased my interaction with clients the more I realised that there was a critical need for financial literacy. I approached the corporate I worked for to highlight the need for financial literacy. Unfortunately the reception was poor and I was advised that “my job was to sell products”. At this point, feeling passionate about the need for financial literacy, I came to the realisation that I needed to branch out on my own and thus School of Savings was born. At School of Savings the adage, “Give a man a fish and you feed him for a day, teach a man to fish you feed him for a lifetime,” rings true. We endeavour to educate, guide and encourage clients to foster a healthy relationship with money. My belief was that for clients to take care of their wellbeing and that of their families they needed to start by managing their personal finance. Clients began learning how to take control of their needs ahead of their wants. In doing so, ultimately clients became more conscious of personal financial planning. As this evolved, I began noticing greater buy-in from clients and persistency remained high. I realised that I was on the right track. I then progressed on to design a programme called PENNYWI$E based on three concepts. The first concept deals with the psychology of money, speaking to developing an enriching relationship with money. Emphasis is placed on making clients understand that if you show money respect, it will respect you in return. It prompts the client to do some introspection and take responsibility for their finances. It also allows clients to focus on their personal identities and the impact it has on what they do with their money. 60

The second concept focuses on the mechanics of money and its utility, what it can and can’t do for you, where it comes from and where it goes to, how you can get it to work for you. The third concept deals with managing one’s debt and the focus is to make clients aware that a toxic relationship with money can be very poisonous for their financial plans and could have catastrophic consequences for them and their loved ones. These three concepts form the backbone of my financial planning process; however, should a client need mentorship on a more structured basis, then this is implemented over a period of six to 12 months depending on when they feel ready to work on their own. Although this is a much longer route to take, clients often feel a sense of relief and comfort as the stress and anxiety that is preventing them from enjoying life with their loved ones is removed because they are equipped to make wise money decisions. This gives them the confidence they need to take time to spend with the people that matter the most in their lives, thereby improving their quality of life. We have found that this approach has strengthened our relationship Joe Chetty CFP®, Financial with our clients. This has translated Planner and Founder of School into clients referring their friends and of Savings South Africa relatives to us. I believe that this is the future of financial planning, where clients understand the basics of money and how it could be a friend or foe. Having this approach ensures that a financial plan becomes more meaningful to them and they understand why it forms an integral part of their lives. The skills learnt are then inculcated in their children. They grow up understanding the importance of financial planning and the impact of making informed money decisions. In so doing, the chances of generational wealth being managed more responsibly is higher and legacies would be carried much further in keeping with the saying that “A good man leaves wealth for his children’s children”. 61

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