Why you should get a financial planner in 2020

Like all cab drivers, he is chatty.

As chatty as that chap from radio who hosts that drive show, I don’t recall his name but I am sure you know him.

I want to put a sack over his head so he can let me stew in the introspection that rainy mornings like this ask of us.

I imagine that these cab drivers are told during induction, “As soon as the client is settled back there, talk, talk and don’t stop talking. Talk until you get them to their destination. Talk until they contemplate opening their door and somersaulting into traffic, Rambo style.”

I wish they would tell them to read the client’s mood first.

Anyway, he gets off a phone call and apologises. “Pole madam, hiyo simu ilikuwa urgent.” He carries on to tell me that he is in an investment group and they are 20 members – they save Sh2,000 every Monday.

GUIDING HAND

They send the money to the chair and at month end, he sends the money to the member whose turn it is to ‘eat’ that month.

One of the 20. I tell him, “I don’t believe in merry-go-rounds for investing.”

He scoffs and says in sheng, “It’s really difficult for someone like me in business to put money aside. Most of us can’t save that Sh80,000 in a month.”

I said “Ooh” when what I really meant was “Oooooohhhh.” Thing is, everybody needs a steady hand to guide them in managing their money.

It is why we join chamas and investment clubs, start merry-go-rounds and table banks, reach out to accountability partners and sign up for courses in personal finance.

We have the intention and ambition but sometimes lack the discipline and insights to see our grand planning through. We are human, after all. We falter.

FINANCIAL GOALS

As a 2020 goal, I suggest you get yourself a personal financial planner. A financial planner is a professional who will step in and take over the reins.

Do the heavy lifting for you. Free you up to focus on other areas of your life. They will guide you in aligning your personal finances to your financial goals, while bearing some of the investment risks.

It matters not how good you already are with managing your money – they will make you better.

Research first. Most financial institutions that offer money-related services likely have an in-house financial planner – bank, sacco, asset management firm, investment bank. (Not KRA, though.)

You could also get an independent planner. The institution is important because you want a qualified professional with proper papers handling your hard-earned money. Not some backstreet quack operating from a briefcase.

You will call them and tell them you need their services. Because they want to make this process easy for you, they will come to where you are.

You sit tight and pretty; no need to muscle your way through traffic and chatty cab drivers, weather that is as moody as an adolescent teen.

OPENING UP

That first meet is about you and the planner getting a feel of each other.

Rapport is crucial because you want someone you can trust, someone to have a loose drink with to openly take-stock of your growth and goals.

I don’t have a cheat sheet for this; your gut will intuit you to each other’s energy. Listen to it.

You tell them who you are and what you do, where you are with your finances and what you want from this relationship.

At some point – assuming your energies are in sync – you will disclose all your income and share your financial goals.

That is, your short-term goals (say, save for my kids’ school fees or for travel), medium-term goals (build a two-year emergency nest; be debt free; double my investment income) and long-term goals (invest in property for my family and for rental income; become self-employed; retire early).

RISK APPETITE

They will also ask about your risk appetite. Or pick it up from your investment history.

Are you risk averse, risk neutral or a risk lover? Your risk appetite informs the type of products they envision investing for you.

Financial planners keep a percentage of your investment income. That means it is in their best interest to make your money, make more money.

Ask them about this – what their management fee is, and whether it is charged annually or monthly.

Bett Kinyatti is a certified accountant with ACCA and a former financial auditor.