How Financial Life Planning is Different to Traditional Financial Planning

Senior man relaxing on a beach

Someone asked me recently, what’s the difference between a Financial Planner/Advisor and a Chartered Accountant I can give you a very simple answer.  In broad terms, an accountant looks at what’s happened financially in the past whereas an advisor or planner looks to the future.  So, an accountant will look at the figures you’ve done over the past few years, then prepare reports and send them off to HMRC to determine what tax you owe, as an example.  A Financial Planner looks at where you are TODAY and where you’re going in the future with your finances (and life) – perhaps even 10, 15 or 20 years away!

Traditional Financial Planning Vs Life Planning

So I answered that easily but it got me thinking some more about what I do and how it differs to what I’d call “Traditional Financial Planning.”  There is a difference.  I am a Financial Advisor/Planner but I’m also a Life Planner and the way I approach financial advice is by using Life Planning.  It differs from Traditional Financial Advising/Planning, yet easily confused.

I Advise the Person

Firstly, a Traditional Financial Advisor/Planner advises on money but, a Life Planner advises on a person’s life, there’s obviously the money side too, which is very involved but they’re hand-in-hand!  A Traditional Financial Planner takes over the responsibility of your finances and spots the problems.  A Life Planner can also see those problems but empowers you to take the right action and take responsibility for your finances, finding solutions. So, when I talk to a client about their finances, I think of it in life terms, not in money terms. I talk to them about what they’d like for their future – and money is usually the root of making those desires come true, it’s the enabler.  A Traditional Financial Planner likely won’t ask what you want for the future but simply advise you to invest in an ISA to have some money down the line or contribute to a pension scheme, so you’ve got a sum when you retire, whereas I go further.  As a Life Planner, I want to know exactly what your goals are and find a way to get you there.  Let’s look at an example.

Clearly Defined Goals

Say you come to see me, and I ask you what your aspirations are for when you retire.  You might say you want a holiday home in sunny Spain where you’d like to spend 6 months of the year playing golf or that you’d like a little home in the English countryside, with a few hens!  It doesn’t matter what you want, what matters is how you’re going to reach that goal and you might not know how you’re going to achieve that.  As a Life Planner, my aim is to get you to that goal but also to make sure that you’re comfortable and enjoy life, with money in your pocket along the way! 

Listening to You

Another thing that a Traditional Financial Planner does is talk. Talk about new pensions, new ISAs, NS&I, investments – anything financial (but nothing to do with living life).  Life Planners listen and that’s the key. Listening creates a space in which I understand what my client is looking for, their aspirations, their future wishes. I won’t talk “at” you, selling you bonds or ISAs or pensions, I will listen to what you want. Only when I fully understand what your wishes are will I start working on a plan of action to empower you to make better decisions to reach those goals, and that may well consist of bonds, or ISAs, investments or increasing your pension (or whatever other financial tool there is that can help).  In brief, I delve deeper, I find out what makes my clients’ tick, what their values are and then I apply the finance to it

A Life Enabler!

I’m not saying that a Traditional Financial Advisor/Planner won’t help you reach your goals but what I do with Life Planning is enable what you want to happen.  I point you in the right direction and keep you focussed on the road to that goal, enabling you to achieve your desires.

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