Difference Between Financial Advice & Financial Planning

Did you know that there is a big difference between Financial Advice and Financial Planning?

Hi guys in this video we’re going to have a chat between the difference between financial advice and financial planning and in fairness there is a big difference between the two and especially depends though on where you’re getting your financial advice or your financial planning advice from and before we go into actually run through a view of various different

Qualifications that are in the industry and the first thing that everybody needs when you get into this industry is what’s called the qfa is the qualified financial advisory exams and you find a lot of people when they enter their career like i did many millions of governor’s life you would have got to pass your qfas and you would have got on the road you would

Have been invoicing clients and those type of positions like all it was in direct business and irish lawyer for the bank consultants etc you’re going to find a lot of people that are going to be on a targeted base salaries and we get extra salary and then they get bonuses or commissions on top of that salary should they reach certain commissions or certain goals in

Various cases in my opinion you’re down to financial advice in that situation where people are advising you on products more than necessarily a plan uh so that product might be a life insurance a protection it could be a a mortgage even or it could be an investment account and the problem for me when it comes to people selling product alone or just trying to find

People to sell product to is that the product might not be in the best interest of the client at that part of time in their life i’m going to give you a quick example we come through a lot of people here at ask paul and that would have been maybe in the public sector a civil public sector and they will have a situation where they’re paying abc is into a pension

Plan and a lot of people have been sold a pension or sold an avc by a product salesperson from a life assurance company or a brokerage per se when it looks at abc is they’re brilliant you know so abcs are very good you get tax relief on the way and you get tax-free growth and they top your pension plan up and you get retirement age but not everybody needs an abc

That i can see when they’re being sold one so fragments say let’s take a teacher at 25 years of age and she has a broker salesperson in the in the staff room talking about abc’s and she gets sold the abc and she takes the abc into consideration and she puts money into the abc for when she’s 65 years of age even though she’s probably going to have full pension

Entitlements as a civil servant or public sector worker now in that situation to me that’s crazy uh because she doesn’t know what her life is going to be at 65 years of age she’s already got a really really really good pension plan and now she’s being topped up more and now again why is that not probably the best advice and i’m using the coin that one room fits

All here one size fits all the main problem for me in this situation is that when she gets to maybe 30 or 32 years of age she may not have a deposit for a health set aside yet or she may have some personal debt as well let’s flip it on the head and put her in front of one of my team and put her in front of a financial planner you’re probably going to get a whole

Map of life between now or 25 years of age right way up actually well past retirement days up to 100 years of age and it’s going to be quite evident about whether she has a shortfall whether she first of all requires an abc or not but also is there anything else to prioritize now in life rather than the adc and more cases than not when somebody’s 25 years of age

There’s a list of things that need to be said in a priority first before going to the abc but the avc financial advisor or a financial salesperson might be in that situation to do it they’re there just to sell the avc so i hope this gives you an idea of what the difference between an advisor in relation to selling product or advising on product only versus the

Financial plan is now here at ask paul we actually do both in fairness so before anybody jumps on and starts slaughtering us and we usually get a kickback we’re talking about the abc guys in particular but we do have an approach for boats so some people will come to us here at ask paul just looking for the likes of an income protection product so they reach out

They book you for a consultation because they want advice in relation to that product alone and other people book in for a mortgage as they just want mortgage advice but more often not people are booking in for the full financial planning consultation where they get everything and that’s neat and that priority list is set and so that’s it that’s the difference

Between financial voice and financial planning in my opinion and yes we do about here so i hope this video has added value on its health

Transcribed from video
Difference Between Financial Advice & Financial Planning By askpaul The Financial Expert