Ben Sinclair

January 19, 2023

My experience with financial planners

Financial planners are a great way to organize your life to meet your financial goals.

Having a financial planner who has done it all before and has the wisdom and knowledge to help you navigate your unique journey can make a huge difference in your life.

Tip #1: Ensure your financial planner has in fact done it all

When you interview your financial planner before engaging in their services, it's important to understand whether or not they are practising what they preach. 

Are they themselves financially free?

If you're hoping a financial planner is going to help you become financially free, you want to make sure they have done it already.

Tip #2: Find a financial planner who aligns with your goals

We engaged our first financial planner when we had a few hundred thousand dollars sitting in our business bank account and owned an investment property. We felt we needed advice on what to do with the excess. 

When we interviewed them, they gave us some great ideas on how to better structure our business and assets as the way we had it set up by an accountant wasn't going to be suitable long term.

As time went on we realised this financial planner wasn't in line with our goals. They helped tremendously and I am grateful for a lot of what they assisted with. But they weren't the right fit long term.

One example of this lack of alignment was when they suggested we sell our investment property and instead invest the money in shares. Our lack of experience resulted in us agreeing to this. I later realised they didn't make money off our investment property but they did off the shares. And we were interested in investment properties long term but were with a financial planner or focused on shares.

Tip #3: Understand their fee structure

The same financial planner mentioned above provided a great service but their fees were very high. When I realised how much it was costing us each quarter, I almost fell off my chair.

When we left the financial planner and were looking for others, there was a mixture of percentage based (1% of net worth seemed to be common) or a fixed fee. 

We opted for the fixed fee because that financial planner better aligned with us and I like the idea that he didn't make money from selling us services.

Tip #4: Your financial planner will treat you based on your financial intelligence

I first came across this idea when reading Rich Dad's Increase Your Financial IQ and reflecting on my experience, it's so true.

I've spent a lot of time increasing my financial intelligence over the years so I can make better decisions, ask better questions and suggest better ideas. I've found as I've become more knowledgeable, I am getting even more value out of my financial planner.

When we first engaged a financial planner, we had no idea about finance and just went with everything they suggested. We didn't question anything. That is a bad place to be.

Tip #5: Make sure you control everything

When a financial planner helps you make investments, make sure everything is in your name (trust or company if you have one) and that you can control it.

Our financial planner was going to help us put in place the purchasing of index funds, dollar cost average style. They were going to hook us up with a platform. I was sceptical about whether we would control the index funds so I called the platform to learn more. What I learned from the call was that if I ever wanted to move my index funds to another brokerage account, I couldn't. I'd have to sell. This I did not like so instead I found my own brokerage account, signed up and purchased the index funds myself.

This resulted in me leveraging my financial planner's advice but I controlled everything.

Tip #6: Yes, you can leave your financial planner

It can be a scary thought leaving a financial planner when they have all your investments and assets tied up in their system. The good news is you can leave. Hopefully, you're in a country whose laws force them to hand over everything.

Don't stay with the wrong financial planner. It's far less painful to cut ties and move on rather than stick with a bad or expensive financial planner long term.

-Ben

About Ben Sinclair

Hey! I'm Ben. I’m a Christian, husband, father, son, friend, writing a book and also the CTO at Tithe.ly. I'm passionate about finance and technology. These writings are for me, however, maybe they’ll be interesting to others. Thanks for stopping by!