Home' Trinidad and Tobago Guardian : January 25th 2015 Contents JANUARY 25 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
FINANCE | SBG5
ideas and I would like to share them with
Fletcher s use of the word "agent" hints at
an important fact about this market: most
financial advisers are tied to insurance com-
Williams estimated this was true in at least
in 99 per cent of cases, but said this was not
necessarily a downside.
"Invariably, there is always the question or
the suspicion that the final discussion will
result in the sale of the product from the com-
panies for which they work. It is not unusual
to find that happening, but the reality is that
many financial issues we have can be solved
by insurance products."
So, in this vast field, how does one pick an
Williams said: "I would look to people who
are qualified in financial planning.Those are
people who have the designation CFP, Certified
Financial Planner, or people who have the
CLU, Chartered Life Underwriter and you also
have the CHFC, the Chartered Financial Con-
sultant. These are people who have some sort
of certification in terms of understanding the
financial planning process."
Then come further questions.
Williams said the potential client may want
to ask about the adviser s background.
"Once you ve identified people with the
relevant financial planning certification, you
then question them. How long have you been
in the business? Do you work for commissions,
or fees, or a blend of commission and fees?
Is your recommendation going to be simply
limited to the proprietary products of the com-
panies to whom you are contracted?"
After being satisfied with the financial advis-
er s credentials and experience, there is the
actual financial planning process to undergo.
Williams said that on the first meeting the
adviser and his potential client will want to
establish the scope of the service required and
clarify the financial goals to be met. This is
the first step of the process. The second is to
Fletcher gave an idea of what this might
"We look at the person s personal informa-
tion. We look at family information. Are you
married? What s your spouse s name, occu-
pation and income? If they have children, you
would want to know the children s names and
ages. Then you want to know if the person
has any insurance in force and the details
about it. Other than that, then we go onto
some financial information, which would look
at what the person owns. The accountants
would call that your assets."
The financial adviser then analyses the data,
develops a plan from it, which the client then
implements to achieve his goals. In the final
step, the plan is then monitored and reviewed
and may be adjusted according to the client s
"Life changes. You and I can sit down today,
and I can say let s build out this plan and then
you say, well I am thinking of something dif-
ferent," said Williams.
"Let us say, for example, you are going to
make education your next priority. Or you got
married or found out that you were pregnant,
as soon as things change, you have to pick
up the phone and say a couple of things are
Williams said if the potential client didn t
get a sense that these steps were being followed,
then they may not want to give the financial
adviser their business.
Fletcher said that advisers, as a best practice,
also had fiduciary responsibility toward their
"We are supposed to put the interest of our
clients and our policyholders above and beyond
our own and carefully ensure that any advice
we tender them will be without regard for our
own personal advantage."
"You may find some practitioners just selling
products, meaning that we have this product,
it s good, that kind of thing. But what I am
thinking, is that we have a responsibility, you
and I, to educate the public. So that even with-
out a practitioner they can look at their finan-
cial situation and say, listen, these are the
things I need and then they can call in a prac-
titioner to help them figure out the best way
to solve the problem." said Fletcher.
Expanding this point, Williams said: "That s
the perspective a financial planner will give
you. It has nothing to do with products. Prod-
ucts are the last thing we talk about. The only
thing that will consume 90 per cent of our
time are the dreams, that we now want to
convert into goals. We compile all of this infor-
mation into what is the best road and then
what are the best products that will allow us
to get there."
Williams also said a financial adviser does
not act alone, but is at the centre of a group
of individuals with relevant skills helping the
client to realise their dreams.
"True financial planners are never individuals
who have all the answers. True financial plan-
ners have a network of people with whom
they work to develop and deliver something
that allows you to achieve the goals you have
set for yourself. If you came to me, I would
have a banker that I deal with to help you
with things you need, because I am not a
banker. I will have an attorney to help you
build a will, or establish a trust because I am
not an attorney. I will have an investment bro-
ker to help you develop a portfolio of invest-
ments that will help you satisfy one or more
goals at different times and in different
Good financial planners also continuously
Fletcher said, in addition to obtaining their
initial license, financial advisers must obtain
"education credits" every two years to keep
"We want to make sure that someone
doesn t get a licence 40 years ago and never
does anything, doesn t keep up to date. This
is what will ensure that the practitioners can
meet the required standard of the public."
There is a significant amount of self reg-
ulation within the financial advisory sector.
In the event that a member of the public has
a complaint to make against a financial advisor,
there are internal systems to treat with issues
"Each company will have there own what
we call things like ethics committees, whereby
this matter can be dealt with," said Fletcher.
Beyond that, there is the financial ombuds-
man, which operates as part of the Central
"Members of the public who feel they have
been prejudiced, have that opportunity. First
and foremost however the company will do
their own investigation, because it is in their
own best interest to do so. It is in our own
best interest to weed out people who would
give this industry a bad name."
Williams also had a warning about financial
advisers who promised guarantees of high
"You want to run very far from anybody
who can give you a guarantee of a much better
rate because in the real world, the market
decides the price and nobody can give you
any guarantee whatsoever of any return."
He said while there were investment instru-
ments that performed consistently well, poten-
tial clients should always pay attention to what
Williams termed the risk/return trade-off.
The higher the return, the higher the risk.
Ultimately, a relationship and trust developed
over time between the client and financial
adviser is the aim.
Williams, for example, spoke of clients who
were now sending their adult children to see
him to have financial plans drawn up for them.
"I think the financial planner should be the
centre of your financial life."
From Page 4
Client's interest the top priority
You want to run very far
from anybody who can
give you a guarantee of a
much better rate because
in the real world, the
market decides the price
and nobody can give you
whatsoever of any return.
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