As a financial planner, one of my greatest joys is in delivering an epiphanic moment for a client—that instant when he realises the potential of money and what it can do for him. That point where I weave together all the money decisions he has made in the past and the decisions he will make and draw a map for where those decisions will take him in the future. That’s when all the dots are interlinked, and everything hangs together beautifully. The purpose of money becomes crystal clear. Sometimes these money decisions do not make much financial sense, but they make utmost psychological sense. This is where personal finance gets up, close and personal for the client. This is when I feel I’ve done justice to my job as a financial planner. 

Financial planning is the skilful synthesis of art and science. It’s a profession that requires emotional intelligence more than intellectual intelligence. It’s all about knowing what makes people tick, finding out their deepest aspirations and seeing whether they have a fighting chance of fulfilling those. Creating the right financial plan requires going down a long path of self-discovery, asking lots of open-ended questions and listening carefully to a client’s fears, hopes and desires. It’s about empathy, human psychology and a very deep level of trust between the planner and client. Sometimes this trust is so strong that the client and planner share information that even the client’s family is not privy too. 

Money is supposed to free you, not shackle you. I have advised countless people to retire early and pick up an alternate career or vocation if their plan permitted them to do so. Recently, we helped a client realise a long-standing dream of being a wildlife photographer. Yes, it entailed compromises and trade-offs and several lifestyle changes. And it did not make financial sense to pursue this career compared to his previous one. He would have been far wealthier in his previous job. But money can only buy so much happiness. Once we charted the course for how he could get to his goal, the client got his epiphanic moment right there. He got what he wanted from the plan and we knew how to deliver what he wanted. The scientific aspect of financial planning then took over and we created a comprehensive plan that factored in the client’s current assets, cash flows, liabilities and risk and then structured it in such a way that what was once a farfetched goal was now within touching distance. 

Or take the case of a couple who wanted to create an animal welfare fund but were unsure of whether they could retire comfortably by doing so. Or the instance where a client quit a well-paying consulting job to start her own line of clothing. There are so many such stories… people wanting to retire early and join politics, start a brewery, or open a philanthropic organisation. Most of these aspirations are achievable. 

On the flip side, often clients hang on to aspirations that may not be financially viable, either because of limited time or resources or both. It is the planner’s job then to also drive home the truth. It may crush them at first, but they will realign themselves to a new normal soon enough. 

Financial planning is not limited to asset allocation, retirement planning, children’s education corpus building, or innumerable scenario analysis. If that were the case, there would not be a profession called financial planning. A mathematical algorithm could work the numbers and come up with recommendations. Planners would get nowhere if they started with complex spreadsheets, risk return analysis, and Sharpe and Beta ratios. They may impress their client with their financial modelling skills, but will lose the client’s loyalty and business eventually because they did not help him accomplish what he really wanted out of his money. 

I am not undermining the technicality and complexity of financial planning. The science behind financial planning sometimes brings even an impossible plan to fruition. In an era of complicated products, high human longevity, early retirement, increasing inflation and low return on investments, a planner must be skilful enough to help the client make the right portfolio choices and navigate him carefully through the complicated web of money management. A well-structured financial plan is the bedrock on which the rest of the plan is built on. 

Financial planning is about making the choices that lead you to a happy and contented life, not just financially but also emotionally. To get to this happy combination, a planner must use both art and science. The goal of all financial planners is to forge long-term relationships that will last for generations. This is where an adviser earns his place in the sun. 

Priya Sunder is director and co-founder, PeakAlpha Investments

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