What are the Benefits of Dealing with a Financial Broker.
Competitive Markets.
This is an underestimated benefit Brokers bring to consumers. With 1,200 Financial Brokers in Ireland, the eight retail life companies are much more competitive with regard to price, product design, investment performance and service than would be the case if they dealt with tied channels only. So before an individual Financial Broker sets to work for the consumer, the existence of such brokers means you will get a better deal from life companies and other financial providers.
Financial Plans and Strategy.
Financial planning starts with assessing the client's financial goals and lifestyle needs-both now and in the future. A Financial Broker will analyse the resources availiable to the client (assets, liabilities, income and expenditure), and the major financial risks they are exposed to, helping them to meet these goals and needs. Issues are identified and, in discussion with their client, the Financial Broker will develop a strategy to mitigate risks and make maximum use of the client's money over time. This gives consumers greater financial clarity in relation to their current position and greater financial security about the future. It provides them with a clear financial roadmap to achieving the things important to them in their lives.
Key Financial Goals.
Some of the typical financial goals Financial Brokers assist their clients with are; protecting the lifestyle of their family in the event of their death or their spouse's death; protecting their lifestyle against illness or accidents preventing them for working; saving for children's education and other goals; saving for retirement; investing lump sums appropriately to get the best return, consistent with the level of risk they will tolerate; setting up a plan to achieve financial independence (where they can live from their assets without the need for employment income). Their Financial Broker will conduct a "factfind" to know them and their requirements and develop a strategy to deal with their financial goals in the priority they set.
Matching Strategy with a client's risk tolerance.
Financial Brokers provide a service tailored to their client's specific circumstances. The client's attitude to risk is of fundamental importance when making forward looking financial decisions. Financial Brokers will work with clients to establish their risk appetite. This may take the form of specific risk analysis exercises and may also be established from the broader context of the interaction. A Financial Broker's experience will be of great assistance in ensuring that clients adopt an appropriate strategy that will go a long way towards matching their expectations with long term results.
Making the best choice.
A Financial Broker will assist in finding a product that fits a consumer's needs. Every case is different. Age and stage in life, current circumstances and future plans will all effect what will work best for each individual client. Financial Brokers are experienced in guiding their clients through this sometimes complicated process.
Price.
Financial Brokers operate on a fair comparison basis. When there are multiple products that match a client's requirements, they will look to the market and find the lowest cost option. Planning for the future is not always a case of finding the lowest priced option but when there are several suitable alternatives it's good to know that you are dealing with someone who can take a broad view of the market on your behalf.
Investment performance.
Future performance is not something that can be accurately predicted and unfortunately, Financial Brokers do not have Crystal Balls to gaze into. However, they have the skills, training and experience to guide consumers in reaching an appropriate recommendation. Many things feed into investment outcomes: Financial Brokers will assist clients in developing a robust and well reasoned process and methodology that will help them reach an outcome that is aligned to their plans and expectations.
Product features and potential pitfalls.
Financial products such as life assurance, serious illness cover, investment bonds and pensions can be complicated. Very often people don't fully understand the products they purchase and can be caught unawares by technical features of policies and investments. A Financial Broker will navigate clients through this maze, pointing out issues and features relevant to them. This gives greater piece of mind in making major financial commitments.
Service.
Financial Brokers exist to assist clients in planning for the sometimes unpredictable future. By it's very nature this is a long term relationship and hence a high level of personal service can be expected. Financial Brokers will look to work through the varying stages of a client's life and help them with sometimes complicated and far reaching financial decisions. One can expect a high level of personal service that may not be available from a very large organisation. Financial Brokers rely to a great extent on their clients for refferals to sustain and develop their businesses so they can look forward to dealing with someone whose interests are directly aligned with theirs.
Arranging the policy and implementing the plans.
There can often be considerable amounts of paperwork involved in implementing financial products. A Fianancial Broker will be familiar with this and ensure that policies and investments are set-up correctly. In some instances there will be money laundering and other statutory compliance obligations. Brokers will be familiar with these and will assist in ensuring everything is processed properly and efficiently, taking a lot of stress and paperwork out of the client's hands.
Review.
Depending on the nature of the engagement of the Financial Broker, an ongoing advisory service may be provided with periodic reviews to ensure plans are updated as personal circumstances change. Financial Brokers will also keep a check for any errors the insurer or provider may make with the administration and management of policies/ investments. By regularly reviewing client's arrangements Brokers will assist in meeting long term objectives.
Long term guidance.
Research shows that people with long term financial advisors typically have higher assets and net worth at retirement age than those who do it themselves, irrespective of income, starting ney assets, education and other factors. A Financial Broker makes the perfect fit for such a long term advisor. They are typically well experienced in the financial services industry, have good "people skills", and are independent of companies and institutions; and the ethics of the business put client interests first. They are well placed to guide consumers through the maze of selecting financial products.
Same relationship.
Sometimes when dealing with large institutions you are rotated regularly as different people move around. A Financial Broker typically has a long term relationship with his/her client so you don't have to spend time repeating yourself and can be assured that your advisor has a full grasp of your needs and requirements.
"What are the Benefits of Dealing with a Financial Broker" is a recent article by Diarmuid Kelly, Chief Executive of PIBA, which appeared in the summer edition of The official magazine of the Professional Insurance Brokers Association.