Moneyworks will soon be running a personal finance roadshow, and this question was asked; will you be covering creating a financial plan and how to find a good financial planner. And what do you need to look for - what do our students need to understand? In fact, what do we all need to understand!”

This is a great question, and one that gets to heart of the financial planning profession. If you find a good financial consultant that you are happy with and trust, then your financial future is likely to be much clearer and you will be far better prepared for anything that life may throw at you. However, if you receive bad advice, the situation could actually be made worse than if you had received no advice at all. There are a number of general points to consider, which I will explain now.

Firstly, how to create a personal financial plan. This will be individual to every person, and no two people are exactly the same. I suggest to my clients that they consider a few points before we meet to discuss their finances. Things to consider would be long term plans, such as where and when you want to retire, how much income you would like to have in retirement, what plans do you have for your family if you already have one, or are you planning to start one?

These are just a few of the issues to consider and there are plenty more, but once you have started to consider these key factors, you can then start to plan how to move forward.

A good strategy to use is the ‘broad concept’. This consists of a series of four questions and these can be applied to any set of circumstances. Firstly you need to consider where your financial situation is now; followed by where you would like to be; then to review the options available to you, and finally what is the best option for you today? Once these questions have been discussed and conclusions drawn, you should be in a much better position to move forward.

This concept can be applied to three generic questions to ask yourself to assist with your financial planning;

• What would happen to your family or dependants if you died before you have financial security?
• What would happen if you lived too long and your money runs out?
• And finally what would happen if you get sick in the meanwhile and can’t work?

I have mentioned these questions in previous articles, but they are still as powerful now in helping to identify how and where a client requires assistance.

Briefly, the first question relates to life assurance. Why do you need life cover? There are a whole host of reasons, but the main one will be to replace you financially in the event of your death. That may sound harsh, but that is what life cover is for, and it is important to look at financial planning in an objective way, so that emotions do not cloud your judgement.

The next issue to consider is your future. Have you saved or are you saving enough to allow you to enjoy the time when you no longer want to work or physically can’t work?

If you haven’t started saving, then you may wish to consider what you would like to do to make sure your retirement is a comfortable and enjoyable one. This may involve asking yourself how much you can afford or wish to contribute, or how much you want to have as an income at retirement.

The third question relates to what is sometimes referred to as financial death. This is when you are still alive but unable to work, usually due to illness or injury.

Some of these questions are quite tough to ask yourself and it can be difficult to keep emotions from influencing the decisions. But I believe it is better to have discussed the subject and taken precautionary measures, rather than risk being caught out with no contingency in place because by then it will probably be too late to do anything about it.

The second part of the question asks how to find a good financial planner.

It is worth reviewing the available companies to see what licence they have. Ask friends and colleagues for their recommendations and referrals. Once you have selected a company, go and meet the advisor in their office. This will allow you to get a feel of the company, how big it is, and how professional and established it is.

During the first meeting, there are some questions you should ask the advisor. Firstly what qualifications do they have? Where and when were these obtained? There are a number of qualifications that an advisor can have and these can be obtained from the advisors home country, where ever that may be.

Another important issue is experience. How long has the advisor been practicing, and where? How long have they been in the Middle East and how much experience of the region do they have?

When the financial review gets under way, what issues are discussed? How are these presented to you? Do you understand all of the areas that are mentioned? Like all industries, financial advice has lots of technical jargon that should be explained to you in an easy to understand manner.   Likewise in regards to any product recommendations that are made to you. Are they in writing? Will you be given a letter explaining why these particular products were recommended and for what issue they are designed to address.

To summarise, everyone’s personal circumstances are different and it is the job of your financial advisor to review and analyse your situation and present to you their findings in an easy to understand, and professional manner.