The general concepts of financial planning are deeply rooted in the high moral and ethical standards. Instead of investing and making general assumptions regarding the finances of one at random, the true purpose of a financial plan is to provide a detailed and impartial understanding of the financial situation of each so they can achieve their specific objectives. Establishing a basis for financial planning has helped many clients and consultants alike bring logic and reason as to why and how to invest, helping to supplant the negative emotions on investment with a sense of confidence and financial security. With that said, it could be sufficient for a financial plan would be the basis for almost all financial decisions. Similarly, it could be used for almost all financial professionals to help determine the appropriate suitability for their clients. Needless to say, everyone would benefit from a target by a qualified professional financial analysis, and these professionals could then benefit from the application of its impartial advice. Why then does a customer have to pay for the services of financial planning in the first place? Or, to put it more directly, why a customer has to pay a fee in an attempt to ensure that they are meeting their best interests? The answer is quite simple. Financial planning should be free.
The first question that should come to mind is: "Well, then how the financial planner living?". Believe me when I say that a living, and beautiful one at that. Not the rate of financial planning to harvest their huge rewards. When a customer pays for a "financial plan" they are paying only for advice. Advisor or planner will still receive a commission implementing the plan, and that's where most of your income is produced. So beware of a professional designating themselves simply as "fee-based". This means they are either charging for the financial plan while collecting a commission, or even worse, just charge a management fee for the allocation of your portfolio. Unfortunately, not many financial professionals allow it to be known easily, and make it look as if they are being compensated only for their expertise in the form of the share of financial planning.
So with a check already in hand, how do you ensure that the client might counsel thereafter will be truly objective? With a monetary commitment by the customer, the professional is then in a position of power and is only required to comply with an obligation not provide real value. By paying the services of financial planning advisor you are saying that the best interest of the client can not be achieved without adequate compensation. Therefore, any value above and beyond what the customer has paid not expected by the consultant. Therefore, it is not only the customer paying their best interest to be met, but that interest can not be fully achieved. Remember, a financial planner is a business owner. Your time equals money, so with a check already in hand, the client is giving them permission to do "enough". They are only bound by a contract, does not add value.
Free financial planning builds a foundation of honesty. By exemplifying their services and not only the fulfillment of an obligation, the financial professional must earn customer trust, highly increase the likelihood that the customer receiving objective advice. Of course, many financial professionals believe they are of the highest integrity, but the only way for the consumer to be sure this is for the consultant to put your money where your mouth. You will be amazed at the amount of financial advisors who take pride in their virtues would magically change their tune when its recommendations (aka: their time and effort) should result in the application to ensure their income.
The two main objections that a financial planner may have against the free financial planning are your time and your credibility may be compromised. To begin, it is true that time owner of a business is its most valuable asset. In fact, the timing may be more valuable than money itself. The argument follows that if you are spending your time putting together recommendations for customers who can not implement them, cut may occur in severe profitability. This ideal is poor on many levels. First, if an advisory is lacking the confidence to provide free services in the fear that their work can not be accepted, it is shown that the bottom line and not the customer welfare is paramount above everything. Therefore they lack the confidence to adequately represent customer needs and meet their objectives. However, the most obvious reason for a consultant or planner to provide financial planning as a free service is monetary. By offering financial planning services free of charge, a financial planer is to establish a relationship of trust and honesty with clients. This solid foundation will inevitably result in a multitude of references to the advisory, which are the lifeblood of your business and the final maximizing your time and effort. The small percentage of income a share expected financial planning advisor pales in comparison to the financial gains experienced by a steady stream of high quality references. In fact, when a financial professional ceases to concentrate their efforts on the immediate satisfaction and begins to operate an honest and decent business confidence, long-term benefits will surely follow.
Here, the idea that the free financial planning lowers the credibility of the financial professional is defeated. A counselor may believe they are devaluing themselves in the eyes of perspective to offer their services for free. However, the real credibility is established by providing exemplary service, not for the rate charged. The truth is that by offering financial planning services free of charge, the financial professional is to maximize your time and legitimize its credibility. If you do not have success with this method, then they do not go beyond your customers, and do not deserve your business or your references. It's a win-win for all parties. The client receives the objective advice they deserve, and the advisor maximizes your time and effort.
If I call my doctor what I think is heartburn, I do not want to pay for heart surgery soon. I want to be properly assessed, given a professional diagnosis, and then billed accordingly. In something as vital as the personal finances of an individual, the business must be completed in a similar manner. It is imperative that an individual receives the most objective advice possible in regard to your financial future. By giving first and receiving later the financial professional is more likely to provide that an objective advice and go beyond to meet customer needs. Accordingly, providing the customer with the services they deserve, the consultant will be rewarded with a great reputation business.To be safe and profitable, the public should let the experts have the opportunity to perform their duties. However, as with most other professions, should at least earn the trust of the people through hard work and exemplary service.