You know that a financial planner should have the expertise to help you pay less tax, provide for your retirement, provide for you and your dependants in the event of the unexpected, and get superior returns on your investments. But do you know that a financial planner can help you gain mastery over your money?

Barry O’Mahony, a financial planner with Veritas Wealth Management, says this is why you need a financial planner, and it’s what distinguishes a good one from a great one.

O’Mahony – who has a diploma in financial planning, a Certified Financial Planner qualification, a degree in economics, a diploma in business administration and a diploma in social studies from Oxford – says the role of financial planners is changing in line with advances in client engagement.

He says that all too often financial planners focus on the technical aspects of the job – such as estate planning and asset allocation – but neglect to build a relationship with their client. This relationship is all important since it has the potential to facilitate your personal growth and save you from mistakes that have life-changing consequences.

O’Mahony gives an example of what appeared to be the perfect financial plan.

“It saved the client tax, had a will, great structures, liquidity; it was all there. Then, while chatting one day, the client happened to mention that a member of the family had a substance abuse problem.”

In that moment, the financial planner realised that “the perfect plan” was about to create a family disaster, and possibly kill someone – handing over an inheritance to a person with a drug problem.

It is imperative that you have “real conversations” with your financial planner, O’Mahony says. “Tell your planner about yourself and about what you value, because it will shape your financial plan.”

O’Mahony tells three stories to illustrate how values shape a financial plan – and how money can serve you or enslave you.

“In early 2008, I was seated at a dinner table between two men. The man on my right had made a lot of money and retired at 55. He had compiled his bucket list (a list of things to do before you die), which he was working through, and he could afford to travel abroad regularly to visit his children.

“On my left was a professional man who had passed retirement age but was still working. About 18 months prior he had been diagnosed with cancer.

“The retired man said he was anticipating a market crash and tightening his belt accordingly: instead of going overseas on holiday, he and his wife would go to the Kruger Park. But the man on my left said he would be taking his wife on their planned overseas holiday because he never knew how many holidays they would get to enjoy together.”

Next up is Tom. “At age 35, Tom has already established and sold his own company; he makes big money, lives in a palatial house, has two expensive cars and sends his two daughters to top schools.

“On the face of it, Tom’s living the life, but come the first of the month, he feels sick to his stomach. He might earn R150 000 a month, but after tax, the instalments on his bond and cars, school fees and living expenses, there’s nothing left to save.”

“Finally, we have Alan and Abbey. They never had children and throughout their working lives they lived on Alan’s salary and saved Abbey’s. When they retired, they were extremely well off – and then Abbey died. Were Alan and Abbey masters or slaves?”

O’Mahony says the purpose of these case studies is to provoke thought and not to judge people for their choices.

He says there are three lifestyle decisions that have the potential to put you on the financial back foot forever. They are: the house you live in, the car you drive, and the schools you send your children to.

O’Mahony explains: “It comes down to how much are you going to borrow to buy a home, and at what age? How much are you going to spend on a car and how often are you going to replace it? And do you send your children to government or private schools?

“As you face these questions, there is one consistent theme: keeping up with the Joneses.”

Whatever your priorities are, you have to make trade-offs, O’Mahony says. For example, some people choose to live in a modest home and drive a 10-year-old car so that they can afford to send their children to the best schools.

Retirement planning constitutes a key component of financial planning, and some aspects of retirement planning are often overlooked, O’Mahony says.

Borrowing from the book The New Retirementality by Mitch Anthony, O’Mahony says he is introducing his clients to the notion of successful aging – or what Anthony calls “saging”.

To age successfully, you need to consider the five Cs before you reach retirement: connectivity, challenge, curiosity, creativity and charity.

“Who are you going to connect with when you retire? Who energises you? What are you going to do to keep yourself challenged, mentally and physically? Who or what inspires your curiosity and creativity? And what are you going to do to give back?”

Back to the gentlemen O’Mahony met over dinner.

“Although he travelled often, the retired man moved to the country, far from friends. He had no hobbies and wasn’t involved in community work. But the man who continued to work remained connected to his profession. He took more time off work to spend with family and friends and challenged himself physically while maintaining his interest in art.

“From a financial planning point of view the retired man was better funded, but his years weren’t as rich as his counterpart’s.”

O’Mahony says he challenges his clients to think about what is truly important to them. Knowing this helps him to help his clients reach their goals.

YOUR PLANNER: GIVER OR TAKER?

Your relationship with your financial planner should be one of give and take, Barry O’Mahony says. “As with any relationship, you want the other person to put your best interests first and not be on the take.”

O’Mahony says that if you understand how a financial planner is remunerated and then ask for advice, you wiII be able to judge if the planner puts your interests first.

“For example, if you have a home loan of R500 000 and you get a windfall of R500 000, your planner could make money from the R500 000 if you invested it. But if he told you to put the money in your home loan as it is a guaranteed return, then he is putting your interests first.”

O’Mahony says planners can easily miss the big picture. Although this can be due to bad intent, often it is for lack of understanding the client.

He says that building a financial plan is like building a jigsaw puzzle. “Most financial planners will be inclined to start building the puzzle with all the technical knowledge – starting with the corner pieces or the borders – before they’ve even looked at the picture on the box.”

To get a full picture, your financial planner needs to invest time in getting to know you in order to serve you.

YOUR PLANNER AS LIFE COACH

Increasingly, financial planners are using coaching techniques to better serve their clients. Many financial planners are, however, still resistant to playing the role of coach to their clients, Barry O’Mahony says.

Both a financial planner and a coach, O’Mahony sees coaching as integral to his work. (O’Mahony played rugby for Ireland A and coached the University of Cape Town’s first XV for three years.)

“It‘s about changing your engagement as a financial planner from trying to be interesting to being interested.

“When you engage with clients on a deeper level, and ask them about how they relate to money and their childhood experience of money, you tend to unearth a lot. Relational issues – money conflicts between spouses, family members who are a financial drain – aren’t always easy to deal with. This is one of the reasons many financial planners focus purely on the numbers.”

O’Mahony says such deep levels of engagement also slow down the financial planning process and can be costly for the planner.

He says a financial planner should “go there” with you to ascertain how these issues impact your financial plan. And you, as a client, should volunteer information about yourself to aid the coaching process.

A GOOD COACH PUTS THE PERSON, NOT THE PLAYER, FIRST

When you help a person realise their potential, success inevitably follows, financial planner Barry O’Mahony says. To make his point, O’Mahony tells the story of Gary Kirsten’s role in coaching the Indian cricket team to world cup glory.

“A couple of years ago Gary, who had retired from professional cricket, got the call of a lifetime: an invitation to coach the Indian cricket team. Gary recruited mental conditioning coach Paddy Upton and the two headed off for India.

“At his first meeting with the team, Gary stands before the most talented group of cricketers in the world and gives them his vision. They stare back at him, stony-faced.

“Afterwards, Gary turns to Paddy and says: ‘Paddy, how do you think that went?’ And like a good coach, Paddy replies: ‘Gary, how do you think that went?’ Gary says: ‘I didn’t hit the spot.’ Paddy says: ‘Let’s work on your presentation.’ He proceeds to coach Gary in a different method of coaching. You’ve got to be humble and to draw people out.

“After lunch, Gary takes another shot at it. He starts by asking the cricketers questions: ‘We’ve noticed you have a 50-percent win ratio across all forms of the game. What are you doing to make that happen? And what do you enjoy doing?’

“Suddenly the energy lifts. Players engage and share what works for them. After tea, Gary reflected back to the team what they had shared.”

O’Mahony says Kirsten and Upton gave themselves a year to get to know the players as individuals. Their goal was to help each player realise his potential as a person first rather than as a player first.

“We believe this is the correct process for financial planners – stop talking and listen, think about what the client has said and then offer advice,” O’Mahony says.