Financial advice: is it worth it?

Financial advice: is it worth it?

There’s a story you hear in professional circles when clients grumble about the amount they have to pay lawyers, doctors and other service providers whose intellectual capital is their greatest asset.

According to the story, Picasso was asked to sketch a lady’s picture. He did so in 15 minutes. The lady was delighted with his work. He asked for a hefty sum of money for the sketch. The lady was most upset at the price she was asked to pay.

“But it only took you a few minutes to do the sketch”, she exclaimed.
“But it took me 15 years of training to be able to complete it so well,” replied Picasso.

Clients of most professionals are generally happy to pay up once they understand that the ability to provide sound advice is built on years of education and experience. Yet, when it comes to financial advice and planning, full disclosure of costs sometimes leads a client to walk away. This is puzzling when you consider the vital importance of having an independent and competent financial planner.

Financial planning is one of the few professions that need to take a proactive role in the client relationship. Most professions act reactively. Clients generally seek the services of an accountant only when they need to file a tax return.

Financial advice and planning, on the other hand, is something that can be put off easily as there is no requirement for instant gratification.

These days, individuals require financial advice at an earlier age for various reasons, including growing numbers of people changing jobs more frequently, increased divorce rates, and globalization.

The financial world has become more complex. Choosing financial products and service providers is no longer a simple task. Financial planners research the various products and providers and find the best solution for the individual.

A one-size-fits-all approach can no longer be adopted for any two individuals.

The cost and risk of providing financial advice have also increased. Costs include professional indemnity cover, compliance services, risk analysis, client management software, and IT.

Clients have also become more demanding in terms of the level of technical competence they require. Advice needs to be clear, objective, and appropriate and, importantly, there must be evidence of an effective process.

Financial planners are also paid to take emotion out of your financial matters. We are all emotional about our future and finances. Fear and greed can be destructive to your financial plans. For example, a couple of years ago, many people followed the herd and piled into money market accounts. Had they resisted their fear of equity markets, their returns would have been considerably higher.

Studies also suggest that persons who stick to a particular strategy consistently outperform those individuals who try to move in and out of the markets.

A financial planning practice must be well funded and well managed, like any accounting or legal practice. You should be assured that, should your financial planner leave, there will be another financial planner who applies the same consistent process.

Financial planners are required to undergo continuous training to ensure that they keep up to date with developments.

It is in your best interest to engage a financial planner who is focused on your best interests.

Choose a financial planner who has systems and processes in place in his or her practice to ensure continuity and that your financial goals and expectations remain on course. Visit the FPI’s website on to select a qualified, fee-based CERTIFIED FINANCIAL PLANNER® if you do not already have one.


Debbie Netto-Jonker CFP® is the founder of Netto Financial Services and was Financial Planner of the Year in 2001.

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