In my blog post First Meeting: Throw away your FNA I described the experience my wife and I had, in the first meeting with a financial planner, who I’m going to call Mike – that’s not his real name.
This blog post is the sequel, because today, we’ve had our second meeting with Mike.
Prior to the first meeting, it had occurred to me that my biases might get in the way of being objective, so I made a point of allowing Mike to follow his normal process and lead, and to try really hard not to put him in a difficult position. I wanted it to be as authentic as possible for both of us, and I wanted this to continue.
The first meeting hadn’t been great. I’d got a taste of what is was like to be a new client in front of a financial advisor, but we persisted, and we were now ready for the second meeting. Perhaps this would be better?
Mike had already sent us generic quotes for life assurance, income protection and critical illness protection by e-mail.
I had already returned the shockingly bad Financial Needs Analysis (FNA) document that he asked me to complete, and had answered the questions as best I could, but I provided no additional information that wasn’t asked for. I wondered whether today would involve a deeper discussion about who we are and what we’re up to.
He still didn’t know who I am or what I do.
Location, Location, Location
In trying to be genuinely helpful, Mike decided that, geographically, he wanted to meet us halfway between our home and his office, so, the second meeting was held in a large, well-known coffee shop/restaurant which was packed full of people.
The Financial Plan
Mike opened his folder and gave me a one sheet summary of the financial plan. Essentially, telling me that in the event of my death, despite my ‘request’ for R1 million in cover, according to his calculations, there was a shortfall of just over R3.5 million and his advice was that this was the sum assured needed – we’ll come back to this later.
As well as the summary document, Mike gave me the ‘Financial Plan.’ It’s a 13 page document. Somewhat concerned about the errors in my figures, I asked if we should go through it, and he said I should do it later, so we skipped over this.
I was wondering how he’d got to the sum assured, but he re-affirmed that this was his advice.
He must be right then.
Mike then proceeded to talk me through a series of quotes he’d prepared. There were five in total, each one 11 pages long.
The reason he had done all the quotes was to show me a range of premiums, because he knew my budget was tight. I guess all our budgets are tight!
He went on to explain the difference between life cover and accidental death cover, which he had included in some of the quotes. My wife, confused, wanted to know why we would buy accidental death cover that doesn’t pay out if it’s not an accident.
Mike: “Cheaper premium.”
Wife: “But it doesn’t do what we need it to do.”
Wife: “So, what’s the point?”
Mike: “Cheaper premium”
This process took a while as the quotes were transferred, one by one, from his reducing pile of papers to my growing pile of papers. After the first three, I sped up the process by saying, “I get it, I’ll read the quotes. The premiums are between R300 and R800 a month. It’s not that complicated.”
He just wanted me to be clear about the options and find a budget I can work with. I understood that. He’s trying to be helpful.
We then went through a similar, but less protracted process with my wife.
The application form
The only document left on Mike’s pile was the application form. He explained the need for open and honest disclosure of medical information and the requirement for medical underwriting and blood tests etc., and I got the sense he was getting ready to ask the medical questions in the middle of this coffee shop.
Immediately, I realised I was going to hospital next week for a procedure, and I didn’t really want to have that intimate conversation in the middle of a coffee shop.
Aside from my discomfort, I didn’t want to put the lady to my right off her chocolate cake!
I said “I’ve got this” and offered to complete it myself, and that was just about the end of the meeting, before Mike hurriedly said he was looking for referrals to new clients. It was a statement not a request, a planting of the seed probably, but it was poorly timed and unnecessary. I suspect it’s something he’s been told to say at the end of the sales meeting.
We left for home, and I was itching to read the financial plan!…
… which I’ll tell you about in the final instalment in this series.