It’s for free (yeah right!)

I recently read an article where the person was writing about how to choose a financial planner/advisor…some of what he said made absolute sense. Such as, asking for references from existing clients and checking that they are in fact registered with the Financial Services Board. But then, I am afraid, he lost all credibility when he suggested that you should “ask the advisor for a free review of your position and some ideas on where you are weak, nothing too specific, he or she does not have to give it all away, but have you ever paid for a test drive, in a car?”

Well so much for professing to be a financial planner – he just compared himself to a car salesman! Surely there are better comparisons for someone claiming to be a professional?

I have a friend who has an excellent (in my opinion) definition of the word “free”. He says that free means “positioned to secure good faith to sell you something at a later stage.” Financial planning is not about selling things to people – it should never be for “free”. There are too many big financial services companies and individuals with hidden agendas that are trying to disguise product selling as financial planning.

There is very seldom anything for “free” – yes, there are times when we might waive the initial consultation fee but rather than comparing himself to a car salesman, would it not be more appropriate to compare himself to a doctor? You make an appointment (with a well qualified person) and you leave with a diagnosis (you might want a 2nd opinion for which you will pay), a prescription and an invoice. You are then free to purchase the medication anywhere you choose. There was nothing for” free” and there was no feeling of “it was for free but I think I’ve just been had!”

In its raw form, financial planning might never ever even involve products. It is about identifying financial risks – not about disguising the sales process.

So yes, be careful how you choose a financial planner – find out if he/she really is a financial planner or a disguised product salesman. And while there is nothing wrong with selling products and there are in fact some really good salespeople, it is not financial planning! So dont be fooled – there is seldom anything for free!