Financial Wellbeing – What It Means To Us.

If you stop and think for a second about financial planning, it’s important to contextualise it in the modern day. Specifically, it’s all about how the role of a financial planner has evolved and changed over time.

In the 1980s, financial advice became popular, but the primary focus of the time was selling financial products. The next phase of financial planning took it a step further and created what would be known today as lifestyle financial planning. Fundamentally, clients decide their goals, and then their financial planners help them to achieve those goals by using various financial products that serve as vehicles to help them get to where they want to be.

However, many people now believe that we are in the third phase or era of financial planning, one that’s more holistic, humane, and centred on an individual’s life: financial wellbeing.

Financial Wellbeing – The Facts

If we had to assign an objective to life, it would be to be happy. Everybody wants to have a happy, fulfilling and purposeful life. However, every one of us is hardwired to make the wrong financial decisions. Research shows us time and time again that humans are prone to impulsive decision making and often make financial decisions that are not always correct. When these things happen, they are serious obstructions to having a happy and purpose-driven life.

Ultimately, we all need help sometimes to achieve financial wellness, which is why a financial planner is often the person people turn to. Having someone who is emotionally-invested in your long-term future, who helps remove anxiety about money, is half the battle. 

Although, it’s safe to say that there are quite a few different types of financial advisers/planners. There are some who are only interested in your portfolio and your investments. They often ask questions like whether or not your portfolio has increased in value, what the asset allocation is, what the outlook for inflation is, and any topics or questions directly related with your money. We would call this more “traditional” wealth management.

However, we believe that the best type of financial planners talk to you about your life before they talk to you about your money. The right financial planner will ask you questions that make you think seriously about your life now and what you want the future to look like. They will help you understand your financial future and allow you to see how you can spend your time doing what you want to do, helping the people you would like to help, experiencing new and exciting things and living the life you want to live. At Pyrmont Wealth, we call this life-centred wealth management.

 

Here’s what Simon Parfitt, Director of Wealth Management at Pyrmont Wealth, had to say about the true meaning of financial wellbeing and the role life-centred wealth management/ financial planning can play in helping clients achieve it.

TEAM PERSPECTIVES ON FINANCIAL WELLBEING by Simon Parfitt 

• Simon, in your own words, what is financial wellbeing? 

“Financial wellbeing is a sense or feeling of contentment and happiness about your financial situation. To feel reassured that you are comfortable with your current and/or future financial position and that you can make confident decisions about how you live your life.”

• As a financial planner, you have a solid understanding of what clients value most. Do you see some common themes amongst your HNWI clients and what financial wellbeing means to them- in other words, are they focusing on specific areas? Are they prioritising certain things in life?

“Basic Needs – Having a buffer that should there be a change of circumstances, that they have something to fall back on.

Protection Planning – Making sure the family is protected and that if something happened to them/their spouse that the family would still be ok.

LifePlan – Having a clearer understanding of what their financial future might look like so they can make more informed choices and decisions.

Optimisation – Being invested appropriately so their money is optimised and properly invested for the future.”

• What’s the connection between life-centred financial planning/wealth mgmt. and financial wellbeing?

“Life-Centred planning is a process to help you achieve financial wellbeing. The planning is to help provide clarity and understanding of your current circumstances and your financial future. It also consists of providing the right wealth management solutions to optimise the client’s financial standing and help them achieve financial freedom and security. And it is delivered with the clients’ life and goals at the centre of all discussions and decisions.”

• What are some key elements to achieve financial wellness/wellbeing?

“I think it’s important to have the clarity and understanding of your financial future so that you can make more informed decisions.

Life is not a rehearsal and you never know what tomorrow holds – so understanding what is Enough to live the life you want, now and in the future is important. Perhaps you can do more than expected sooner than expected!

The aim is to ensure you can live the life you want, without your money running out and still be able to take care of all the people that you care about or might want to help.”

Questions a Good Financial Planner Should Be Asking

A good financial planner will ask thought provoking questions that enable you to focus on what matters most to you and those around you. They might ask you questions such as: 

• What’s happening in your life right now? 
• What fun activities do you enjoy doing? 
• What gives you a sense of purpose? 
• What are your personal values? 
• What does your children’s future look like? Are they going through school or university? 
• What major milestones or goals would you like to achieve?
• What gives you worry and anxiety? 
• Where do you want to live in five or 10 years? 
• Who will you be spending time with? 
• How much is ‘enough’ for you?
• Do you have a life plan?
• What kind of legacy would you like to leave behind?

And How Do We Achieve Financial Wellness?

To achieve financial wellness, you have to overcome a few barriers.  You have to establish good habits that bring more positive and “good things” in life. Then, you need to think about the kind of things you might do that will stop you from achieving your goals. This is often the big issue that people run into.

Unfortunately, most of us live in a world we’re not happy with. Social media is a particular problem here, creating a false sense of worth that we measure ourselves against. Many work hard to have financial stability, so why isn’t it bringing them happiness? 

Maybe you go to work every day but aren’t enjoying it and feel like you can’t leave your job. Maybe you feel like you can’t move house. You know these barriers to financial wellbeing in your life exist, but finding the time to sit down and actually think about it? Well, that’s another matter. 

We’re so busy with our day-to-day lives that just taking those few minutes to have that conversation without the phone ringing or emails pinging is hard to do. 

However, a good financial planner will work with you to achieve financial wellbeing. They encourage you to take a step back, look at how to achieve your goals, and stop measuring yourself against unrealistic expectations.

Final Thoughts

At Pyrmont Wealth, we care about your personal and financial wellbeing. We focus on first getting to know you, asking the right questions about your life and money, developing a LifePlan, and helping you every step of the way. We work with successful professionals and families, and help them achieve their goals through our life-centred wealth management approach.  The results can be rather rewarding for you- and us.

Contact us today to learn how we can help you in your financial wellness journey.