Do I need a financial planner?

Do I need a financial planner?

Do you actually need a financial planner, and if so, what should you expect from one? Some people treat their financial adviser like an order taker, arriving with fixed ideas and expecting the adviser simply to carry out their instructions. But it really shouldn't work that way. A good adviser is someone who challenges you and asks searching questions, and one of the most valuable things they do is help you recognise the self-limiting beliefs that hold you back.

In this video, Chris Budd, who used to run a financial advice business and now writes about personal finance, explains why the best advisers challenge your thinking rather than just take orders. He points out a familiar pattern: the general public tends to buy into the stock market when they feel good, often just as it's about to peak, and sell out in a panic when it's near the bottom. Much of this is driven by emotional decisions and by self-limiting beliefs, the ideas we hold that feel true but aren't. As Budd puts it, beliefs are not truths. Someone who once invested at the top of the market, saw it fall, and concluded that investing "isn't for them" is a classic example. A skilled planner helps clients become aware of those beliefs and then move past them.

You'll learn why a good financial adviser is much like a sports coach: firmly on your side, but willing to be tough with you when it helps. For this reason, Budd is a strong advocate of planners being trained in coaching, so they can challenge clients in a non-threatening way, prompting them to think about their lives, their assumptions, and the things they might want to do but never realised they were allowed to. He even raises the idea of "permission", including permission to be happy and to enjoy the money you've worked hard to build.

The video also shows how deeply these beliefs can run, often held since childhood. Budd shares the story of a client who loved golf, whom his firm tried to treat to a VIP trip to the Ryder Cup. She refused, saying, "My dad wouldn't like it", even though her father had died fifteen years earlier. Self-limiting beliefs like this can quietly stop us living life to the full, precisely because we've held them for so long that we no longer question them.

The takeaway: don't be offended when your financial adviser challenges you. Far from overstepping, they're probably doing you a real favour, helping you see past long-held assumptions so you can make better decisions and get more out of both your money and your life.

Chapters / Key points

• Why an adviser shouldn't just be an "order taker"
• Why a good planner challenges you and asks searching questions
• Chris Budd on how emotion drives buying high and selling low
• What "self-limiting beliefs" are, and why beliefs are not truths
• How a planner helps clients recognise and overcome those beliefs
• Why a good adviser is like a sports coach
• The case for advisers being trained in coaching
• The idea of "permission", including permission to be happy
• Why these beliefs often date back to childhood
• The Ryder Cup story and being beholden to old beliefs

Transcript

Do I need a financial planner?

Robin Powell: Some people treat their financial adviser like an order taker. They go to them with set ideas about what they want. The adviser's job, as they see it, is to carry out their instructions. But it shouldn't be like that at all. You need an adviser who will challenge you, and ask you searching questions.

Chris Budd used to run a financial advice business. He now writes about personal finance.

Chris Budd: The general public will tend to invest in the stock market when they feel good. And that means when the stock market is just about to peak. And they tend to get out when they panic, from emotional decisions, i.e. when it's at the bottom. Everybody has seen this happen all the time. You only need to look at the inflows and outflows in the stock market to have that proven.

"Self-limiting beliefs" is the phrase we use for this. It's beliefs that we have that are not actually true, or not necessarily true, because beliefs are not the same as truths. And that's a great phrase that I come back to all the time: "Beliefs are not truths." So, you might have somebody that will come to see you that doesn't like the stock market, is risk-averse, because they went in once at the top and it went down, and therefore they think it's not for them. So, what we need to do as financial planners is we need to help those clients to overcome some of those self-limiting beliefs. In fact, to be aware of them, first of all.

Robin Powell: A helpful analogy for a good financial adviser is that of a sports coach. They're absolutely on your side, and sometimes that might mean being tough with you.

Chris Budd: For that reason, I'm a big advocate of financial planners being experienced and preferably trained in coaching. So that we can challenge clients, but challenge them in a non-threatening way; challenge them in a way that will get them thinking about their lives, thinking about their self-limiting beliefs, thinking about things that they might want to do that they didn't know that they could do, things like permission. Permission is a fascinating subject, permission to be happy.

Robin Powell: Self-limiting beliefs can stop us living life to the full. One of the reasons we fail to recognise them is that we've usually held those beliefs for years, often since childhood.

Chris Budd: We have a client who we were trying to get to spend some money. Again, a lot of financial planners will have this experience. It's hard to get people to spend money when they've got it. So this particular lady, we were getting very excited about golf, she likes her golf, so we were trying to organise a trip to the Ryder Cup for them. And it was going to cost quite a lot of money, VIP, really fancy, you know? And she said, "No, I can't do that. My dad wouldn't like it." Well, her dad had been dead for 15 years, but she was still beholden to him.

Robin Powell: So, don't be offended when your financial adviser really challenges you. They're probably doing you a big favour.