What I learned when I met two financial planners

Deciding that her partner's retirement meant that it was time to 'walk the financial planning walk', Money Observer editor Faith Glasgow met two very different advisers and shares what she learned.

Prior to the past few months, I have had personal dealings with financial advisers only a couple of times. In my first encounter, several decades ago, I was persuaded it would be a shrewd move to pull out of the company pension and open a personal pension with the Equitable Life. That was not my finest hour, with hindsight, though I was not alone: you would be surprised how many financial journalists in the 1990s lost their savings that way. The second encounter involved some life insurance policies, on which I am no doubt still paying a meaty trail commission; however, the adviser's input was worth paying for.

The emergence of the online marketplace for most financial products has marginalised the role of financial advisers in many circumstances where in days of old an intermediary was par for the course. But as we’ve said in these pages on many occasions, there are still times when the input of a financial expert can make eminent sense.

Retirement decisions

Among the most obvious of these is the run-up to retirement. It's a time when decisions about how to organise pension pots and other non-pension sources of income such as ISAs or rent from a buy-to-let property may often collide with wider questions: how or whether to give grown-up children a helping hand financially; whether to downsize or relocate as part of the new phase of life ahead; or even whether to free up capital for a whole new business venture.

The financial landscape can suddenly become quite complex, even if you don't think of your finances as either extensive or particularly complicated, and an informed, rational, holistic perspective may be well worth paying for.

My husband will be retiring on the day this issue of Money Observer goes on sale. He's very lucky in having a civil service-type pension available from the age of 60, and he's more than happy to take it and get on with the long list of non-work projects he's been compiling over recent years. So I have found myself in recent months facing up to the fact that we really should walk the financial planning walk.

In practice, however, it has proved quite tricky to find financial planners willing to provide a one-off consultation – effectively a housekeeping exercise to ensure everything is in the right place and working tax-efficiently. Most, I guess understandably, are much keener to establish an 'ongoing relationship' involving management of the client's assets, rather than simply to provide an assessment of the current situation for a flat fee.

In the end, we talked to two financial planners (both of whom expected the conversation to become ongoing over time). It was an interesting experience on a number of levels – not least their differing approaches to the initial meeting. This first session is typically without charge or obligation, an opportunity for both parties to sound the other out and for the planner to learn more about the prospective clients, their assets, lifestyle, expectations and aspirations.

Or that's what I'd understood anyway. In practice, our meeting with the first planner left us feeling we knew considerably more about him and his impressive career as a leading light in the financial industry than he knew about us and our circumstances. Nonetheless, he assured us that he would be able to help.

A few days later we received a quote for the financial assessment we had asked for; it was 50% more expensive than the indicative fee we’d previously been sent, which we were told was a reflection of the added complexities of us both currently being in work.

Acting in our best interests

We decided not to pursue that line of enquiry, and a couple of months later met with another planner. This conversation was much more on the lines I had been expecting, and became all the more interesting when he whipped out his laptop and showed us a very clever programme that, given certain assumptions about lifestyle, investment performance and the like, could project what kind of income we might have and how our money might last over the coming decades.

After an hour and a half or so, he put his laptop back in his bag and stood up. "I don't think you need me at the moment," he said. "I don't think there's anything really useful I can do for you now. I'm happy to help anytime if you have any questions, but if not then get back in touch in a couple of years and we'll take it from there."

It was a genuinely refreshing message to hear, and not least because it leaves us with the sense he is acting in our best interests in not attempting to drum up further business at this stage. And partly as a consequence of that, there's a very good chance that in due course we'll be back in touch.

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