What Makes You A Good Financial Planner…
I have decided to write a post on this after a personal conversation with my relative during our Chinese New Year dinner. And it was this conversation that I finally got to know the reasons why he did not engage my financial services even though he knows that I am in this career for over 4 years plus.
This post is also a reminder to myself, to any person who is inspired to be a Financial Planner or are already one – on our duties and obligations to any clients that we are attending to! Even if you are a person who believe in the benefits of insurance, you can read this post to know your rights as a client!
What Did I Gather From The Conversation?
My relative believes in the benefits of insurance and have taken up a lot of plans (and paying a lot of premiums) when he was in his working age. His neighbor happens to be starting out as a Financial Planner and also happened to be his first point of contact – as such, my relative took up all kinds of insurance that she recommends. He even recommended his colleagues and friends to support the neighbor. This lady rose up the ranks and achieved many accomplishments like MDRT.
She is retired and she has since passed on all her portfolios to her son. And her son is supposed to be the servicing agent of my relative.
My relative was well taken care of by the Lady – she responded to most of his queries and needs. But after the son took over, things changed. Whenever my relative has a question with regards to his existing policies, all he got from the new Agent is a simple few word answers. Nothing more than that. My relative wanted to file a claim but was told on the phone that it cannot be done and there’s no further explanation.
The time that my relative really hear from the new Agent is when he needs to hit his sales target and wanted the support from my relative. At that point of time, my relative is already retired but… he still supported with a 15-year Endowment Plan (when he actually wanted a Term Insurance and Health Insurance).
All these happened 6 years back and in this year itself, my relative feels that he does not really know what he has been paying. He wanted to terminate the plan but was told that the surrender value for his 6-years-old Endowment Plan is a big Zero! Of course, he was shocked to hear that and was told to keep paying… My relative does not know what other options that he can have…
And this is just a small part of his bad experiences. He related all these to me and expressed that he has been quite foolish to have committed so much yet do not know what he has bought at the end of the day. He bought because of the friendship and support for his neighbor. Now.. he is beginning to hate Insurance…
It was this conversation that really got me thinking real hard of what makes a good Financial Planner… And the five pointers below are what I feel are the duties and obligations of a good Financial Planner…
My Top Five Duties And Obligations Of A Financial Planner
1. Understand The Real Need Of Any Client! My relative wanted a Term and Health Insurance but was sold an Endowment Plan instead. True enough, there’s sales target to hit but at the end of the day, you must answer to yourself whether by recommending a plan that’s not really beneficial to a client but only to your sales target. Only something really happen… will you be answerable?
2. You Are The Expert, So Please Explain! It’s true that most people still buy insurance because of friendship and support. They do not really know what they buy and they make their final decision based on your recommendations. The very least that you can do is to explain the nature of the plan (Savings, Protection or Investment) and the benefits.
3. Not Just The Positive But Also The Negatives! It’s true that Insurance is still like a sales job and positive benefits tend to get the sales done. Negatives tend to set the client thinking twice! If you really care about your clients and their overall financial well-being, please make sure that your clients know the limitations to their insurance plans – Surrender Value, Exclusions, Fees and Charges, What Benefits Of Not Being Covered In This Plan But Available In Other Plans.
4. You Are Successful Because Of Your Clients! So please do continue taking care of them even after you stop collecting commissions from their plans. I know you have your sales to catch up and every minute is precious in terms of prospecting for new clients. But do remember that it’s even easier to get another business from your existing clients than to get from new ones. Take good care of your clients and I believe your clients will take good care of you.
5. Recommend Plans That You Really Believe In! Face it! Not every plans that your insurance company is offering are the best! For example, when I was still a Tied Agent, I knew that the home insurance from my previous company offers the most basic coverage and that there’s other better plans that are more suitable. If a client comes to me with a particular interest to get a comprehensive home insurance, I would rather refer that client to someone else than to convince (confuse) him in getting the one that I am offering.
This is also the case when there’s promotions for a particular plan. The promotion may be good on the surface but you know that internally it’s not that beneficial to your clients, then do not recommend!
The five that I have listed down here are just a small part of many other duties and obligations that I have not really mentioned. But in general, if you want to be a good Financial Planner, you should have your own set of principles that will benefit both you and your clients. Similarly, if you are a client, you have all the rights to have your Financial Planner answer your queries – this is one good way to bring out the goodness of him!