Data gathering – the next step after choosing your financial planner

By David Lamb CFP™ MCSI

Once you have settled on a financial planner you feel comfortable with and are confident that they can provide value for money, the next stage of the process is data gathering.

For most people, the main aim of financial planning is to achieve and maintain their desired lifestyle, without the fear of running out of money, whatever happens. The purpose of data gathering (or fact finding) is to help you and your planner understand what resources you have available to support your aims and objectives.

The easiest data to gather is the quantitative data, (the facts) which will include income and expenditure, assets and liabilities, along with details of your will, if you have one. Family details are essential.

To save time it is usually easier to give your planner account numbers for all your financial products. They can then provide you with a letter of authority to allow the providers (investment or insurance companies) to give them all the information they require.  Mortgage providers are likely to charge for this, so best dig out your latest mortgage statement.

Contact details for other advisers such as your accountant and solicitor are helpful because your planner may need to work as a team with fellow professional advisers when tax or estate planning.

These quantitative hard facts are essential but qualitative, soft data is also vital to help you achieve your aims and objectives. This information is usually best discovered in a conversation with you.

This could include questions to help your adviser understand your current and desired lifestyles, your expectations for retirement and plans for your family such as funding children’s weddings and house deposits.

It is not uncommon for clients to have given little thought to these questions and therefore to not have a clear vision of what they want.

With more than 30 years as a financial adviser my experience suggests that many clients don’t know what they want, but they do know what they don’t want, which is anything less than they have now.

We have some free resources on our website at which ask you questions you may not realise you need to know the answers to – and to help you quantify your lifestyle and identify areas for improvement.

Once this data has been collated and analysed your planner can then build cashflow projections based on your current position, showing where you are heading without any planning.

They should also compile what is basically a set of accounts, detailing your income, expenditure, assets and liabilities, along with inheritance tax calculations. Before they do all this though, you all need to understand and agree the assumptions made in these calculations.

More on this in our next blog.