A Pro-Active Financial Planner

The definition of being pro-active is to think and plan ahead. I've considered some of the main steps we've taken to be pro-active over the last few years and why and how this has helped improve our service to dentists.

Specialisation

We made the decision to specialise in working with dentists over 10 years ago to the point where almost 100% of new clients we take on now are dentists or the spouse’s of dentists. As a result of having a very select group of clients we can afford to invest the time to learn everything there is to know about NHS pensions, and for example to understand the effects of incorporation for dentists on areas such as their pension and income protection, as well as tax. However if we were dealing with doctors, vets, pharmacists and every other profession it would be very likely that we could end up being a jack of all trades and master of none. This specialisation has meant that we have been able to improve the service we offer dentists as our advice is thorough, well researched and more often than not, work for one client can end up benefiting another.

Contacts

Having worked with hundreds of dentists over the years we have a huge number of contacts across the professions from Solicitors, Accountants, Banks, Leasing Companies, Marketing agencies and Valuers. We're also members of ASPD, Association of Specialist Providers to Dentists, which demonstrates our commitment to working with dentists and provides a forum for the members to share information and constantly improve our understanding of what's happening in dentistry. This also means that, where relevant, we can refer to trusted other professionals and help our dental clients in all areas of their practice. Investment We've spent a considerable amount of time developing an investment platform for clients to benefit from lower costs and improved returns based on the risk they're prepared to take. The launch of this platform last year ensures that we're fulfilling the FSAs increasing demands for IFAs to ensure they can effectively monitor clients' investments and demonstrate that clients in similar circumstances with the same investment objectives would get the same investment advice. Sounds like stating the obvious but where there are several advisers, much like when there are several associates in a dental practice, it's important to ensure that all clients can receive consistency of investment advice.

Changes in Financial Services

In 2013 the Financial Services Authority introduced the Retail Distribution Review (RDR) and commission charging was abolished and financial advisers have to charge fees for advice rather than commissions. Done correctly this can be a more equitable and transparent. Rather than wait until 2013, we started this years before and finalised our fee proposition in 2010. Another effect of the RDR is to force an increased level of qualifications on advisers. We've always felt that to be the best advisers to dentists we needed to be the most qualified advisers so we have both Chartered and Certified Financial Planner status. Not only is this significantly more than the minimum standard required but we also achieved it years before the standards were introduced.

Education

We want to educate dentists as well as ourselves with regards to minimising tax and organising finances efficiently. We therefore regularly present at seminars throughout the UK including most of the dental universities.

IT

We've made considerable investment in IT to ensure we have the best technology and back office support to help service our clients. This means that we and our clients have 24 hour access to up to date details of all their investments and insurance plans on-line. We have also introduced a further layer of IT which means we can help clients make planning decisions based on their current and future financial situation.

Financial Planning


This is perhaps the most important aspect of a Pro-active IFA - which involves more than just financial advice and means taking a step back and looking at what’s really important in a client’s life and then helping them use their capital and income to achieve their goals. Financial planning is about making sure you can have the lifestyle you want now whilst maintaining enough to ensure you won’t run out of money before you die. We’ve also found that although it’s important to find out whether Aviva, for example, is better for your finances than Standard Life, or whether Passive funds are superior to Active funds, that’s not what clients want to discuss with us. What our clients want to hear is how best to take control of their finances and their lives. What clients really want is practical and proven answers to questions like: "How much do I need to earn, save or sell my practice for, to give me the lifestyle I want?" "When, precisely, can I afford to start focusing on the things that I enjoy?" "What do I need to do to ensure that I never run out of money?" "Exactly what level of investment return do I require in order to achieve my goals?" In fact a client said to me last year, "I don't want to have to spend my retirement shopping in Aldi, when I've spent my life shopping in Waitrose and never had to even look at the bill." Other than having the comfort of knowing you can afford to shop in Waitrose for the rest of your life, some other examples that this type of process has had for our clients include the following:

  • • A client realising they could afford to donate £75,000 to a church building project
  • • Clients understanding they continued to run their practice because they enjoy it not because they need the money
  • • Clients’ deciding to retire early once they were assured that based on reasonable assumptions, they were able to maintain their standard of living
  • • Clients’ moving all pension assets to cash as they didn’t need much growth in the fund to provide the income necessary and security was more important than a higher income (co-incidentally benefiting when the stock market crashed)
  • • Clients giving £100,000 to their children, safe in the knowledge this wasn’t going to affect their retirement plans So that's what being pro-active means to us at Essential Money and that's why we're so passionate about helping our dental clients make the most out of their money.
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