What Are Objectives

WHAT ARE OBJECTIVES

Most parts of the client questionnaire / fact find document give the financial planner an understanding of the client’s current position.

To gain an understanding of where the client wants to be in the future the needs and objectives section needs to be completed. This should also address short, medium and long term goals.

E.g. 1 Short term less than one year Medium term one year to three years Long term three years and longer

E.g. 2 Short terms less than one year Medium term 12 months to five years Long term five years and longer

There is nothing in legislation on term and time factors so it is important that you set a standard not for one but for all so a standard can be used across the business as a measurement that is consistent.

The client may have a range of objectives and no two clients will have exactly the same needs and objectives.

A planner should conduct the interview with skill and professionalism. This in turn will generate trust; give the client ease to provide information freely about them. The trust is an important aspect of the relationship that is forming between the client and the planner.

In particular where the client/s is now, financially and socially, and where they want to be in the future is only obtained when a planner has the trust of surety and integrity of their information.

The gap between where they are now and where they want to be will have to be discussed. This is part of the risk assessment and understanding income, expenses, Assets liabilities and taxation along with short medium and long term investments they may hold inside or outside of structures.

The issue of the various risks and importantly the time one has before access and changing direction is paramount in providing advice. The planner has the job of assisting the client using their education and experience and overlaying this to the clients situation.

In theory the financial plan is a map to assist in achieving financial security.

You should not limit the objectives of a client to simply what the client has asked for at the start of the interview. You have a responsibility to ensure you uncover any additional needs and to discuss objectives that a client may not realize they have.

An example of this would be to discuss the need for a current Will. Many clients would say they want this or advice in relation to this however it is not until you discuss some issues around estate planning that a client says they may be inclined to look into this more.

You should be able to link your recommendations back to the client’s needs and objectives. In most instances you will have to show in your Statement of advice this link between what the client wanted, your advice and strategy and any products you have recommended.

Author Michael Clay May 2009