How to find a financial planner who is able to draw up a roadmap for the client? It is important to understand the following:

• Transactional advisers and
• Relational advisers

The majority of people have only met transactional advisers. The obvious transactional ones will be those who openly prospects in the bus interchanges, those whom receive calls from telemarketers marketing specified products and financial consultants at the banks. There are also many insurance agents and IFAs who are also transactional in their approach. The transactional advisers aim is to make a sale as fast as possible. They are not keen to “wait” for the client to think about it.

For a person to receive a proper financial plan, four things must happen:

• The adviser’s core business should be one of relational. To him or her, it is more important to keep the client long-term than to make a quick sale. The rationale is that a long-term client eventually will buy something in future;
• However, a proper financial plan can only happen if the adviser expect no future product sales otherwise there is a temptation to become a transactional adviser;
• Ideally, the financial planner should be remunerated initially for developing the financial plan and subsequently remunerated in future review. To ensure that the planner and client interest are aligned, it is quite common that the planner’s on-going remuneration is in tied to the performance of the client’s wealth. In the industry, the jargon is a “retainer fee”;
• The financial plan is required to be a written document. Many transactional advisers will not give a written document because it increases liabilities. If they do give some documentation, it will be those “templates” style peppered with disclaimers;