A Certified Financial Planner is not just a professional but the most trusted aide of the client. While a degree or certification can get you the required qualification, there are certain skills which separates you from the rest.
Financial planning isn’t just about gathering information from clients, synthesizing it and presenting them with a customized financial plan. Building relations with clients is an art and you need to work on your professional as well as personal skills to achieve this.
Here are 7 ways that help you to become one of the most sought after financial planner:
1-Be a trustworthy partner to your client
You need to become the most trusted financial partner for your client. Being a Financial Planner is not just a profession, it is doing service to your clients and helping them with the most important decisions of life. Hence, you need to always be open for communication. The clients should be able to confide in you with the most crucial details. Not just this, you also need to maintain confidentiality about the client’s financial plans and not reveal it to anyone without their permission. Maintaining confidentiality is also a matter of ethics.
2-It’s about their goals not your target
Whether you are self-employed or working with a wealth management firm, you are bound to have sales target to achieve. But the target should not deviate you from your path of offering unbiased advice to your clients. If your client has short-term objectives, you should not try to forcibly convince them to take a ULIP or insurance policy. Remember, it is about their goals, not your target.
3-Keep clients in loop always
Financial markets and the economy is dynamic. As a Financial Planner, you will need to re-balance the portfolio of the clients from time to time in order to factor in the these changes. While doing so, you should not keep the client in dark. You must try to convince the client about the necessity to re-balance. However, if for some reason, the client doesn’t want to go ahead with the suggested changes, you should avoid doing so.
4-Demonstrate excellent analytical abilities
A sound financial plan requires a holistic approach. This involves tax planning, retirement planning, estate planning, will writing, insurance planning etc. A Certified Financial Planner must possess sharp analytical skills to understand the goals of the client. You should have the ability to structure the portfolio in a way that offers an ideal mix of risk and return.
At the same time, the portfolio should also be flexible enough to allow reallocation of assets if the situation demands. As a financial planner, you will also have to analyse the performance of the portfolio from various perspectives. For this, you must demonstrate expertise in practical implementation of strategic asset allocation, tactical asset allocation, analyzing beta, standard deviation and calculating Sharpe’s and Treynor’s ratio.
5-Build superior risk management skills
One factor that differentiates a good financial planner from an average one is his ability to manage risk. The very first step before creating a financial plan is to offer guidance on risk management issues to clients. Risk management is a dynamic phenomenon and there is constant requirement of risk measurement, management and monitoring. The client’s risk parameters must be clearly defined and evaluated at intervals. Risk tolerance also changes with time so you need to keep tab on the changing behaviour of the clients. To be a competent Financial Planner, you must be able to analyse risk at various levels such as market risk, credit risk and liquidity risk. To achieve an ideal risk-reward balance, you need to identify, measure and monitor those risks.
6-It’s not about what you know but what you can explain
It’s a given that as a Certified Financial Planner you have vast amount of knowledge on various aspects of wealth management. However, you must also be in a position to convey the same to clients. Most of the clients aren’t even aware of various concepts which you use in your daily work. Breaking down complex ideas into relatable concepts and explaining the same to your clients in an articulate way is a skill worth mastering.
7-Pass on your wisdom to clients
If you are a Certified Financial Planner with quite a few years of experience, you are sure to have considerable amount of wisdom. Now wisdom is different from plain knowledge. Wisdom is a combination of knowledge and experience. You have experience in dealing with clients who belong diverse backgrounds and had various financial problems.
So, it is important for you to pass on this wisdom to your clients. Whenever a client is reluctant to make necessary investments as required, you need to give them a reality check about their path ahead in life and convince them based on your experiences.