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A great Financial Review can feel like a million bucks – and worth that, literally

Posted 5 August, 2020 by Clearly
in Technical Smechnical

A journey of a thousand miles starts with the first step, and being properly insured starts with having a financial review.

When done right, it can feel like a million bucks because you will walk away with insights you never thought existed, and it can be worth a million bucks because that could be the exact amount of cover you need.

With such a cheezy cliche to kick things off, you just know that the rest of this article is gonna kick some serious ass and carpet drop those knowledge bombs.

Press on, dear reader, on your quest for more financial knowledge.

 

What is a Financial Review?

 

By and large, it is an information-gathering process from a financial professional to understand:

1. Your personal situation and life stage

-age
-investment experience
-general financial literacy
-budgeting proficiency

2. Your financial situation

-income
-expenses
-financial dependents (if any)
-assets
-liabilities

3. Your current state of cover

-Insurance policies owned
-Their salient details: Premiums, Type of Cover, Amount of Cover, and their duration

4. Your personal and financial goals

-Are children on the cards for the future?
-Travel?
-Home Purchase?
-Running a start up?
-Retiring early?

Much like trying on shoes, since every individual is different, their responses and intricacy of questions received will vary.

For example, John is who is a fresh grad and just receiving his first paychecks is going to have a drastically different line of questions than say, a certain Ivan Lim.

 

You think politics is tough? Wait till you operate a Life Insurance education blog, buddy

 

How is a Financial Review useful to you?

 

The process of the review is interesting for sure, but it is the outcome that is crucial.

Three main outcomes that you really want, and that are useful:

 

Get clarity on your current situation – just by articulating it, because it is not every day that you get asked a series of systematic questions.

Stoke you to take action – especially if you are behind on your goals or lack some form of cover that could bite you in the future (tomorrow is also included)

 

This is how you should be feeling once the review is over

 

Or, for a lucky minority at least:

Sit back and rest assured – that you are still on track and sitting pretty, at least from a financial standpoint.

 

Signs of a great Financial Review

 

Sad to say not all reviews are created equal, because there are definitely some farces that occur from time time, due to the nature of this industry. (which is a whole other article by itself)

Suffice to say, if the professional conducting the review is worth his salt, then some positive signs would be:

 

  • It delves into your needs, desires, and goals
  • It is comprehensive (asks about your family, future plans, current issues)
  • You learn new things along the way, and it isn’t just a one-way interrogation
  • You find yourself thinking about issues that might not have occurred to you before, like the impact of contracting a severe illness
  • You feel that the professional is really listening and providing insight, instead of rushing the process to secure a sale
  • You don’t feel pressured to make a decision on the spot, but neither are you too lackadaisical about taking action

 

The last point is especially salient since the purpose of a Financial Review is to ensure that any coverage gaps you may have are going to be taken care of. If you have such gaps, but are not suitably motivated to do something about them – then the whole endeavor has been a waste of time.

It’s a hard truth, but you’ll thank us for it someday.

 

Should you pay for one?

 

In a word, no. Run far away if ever you had to pay for one.

We’ve been in this industry for a number of years and seen a whole host of shenanigans that companies, agencies, and individuals try to pull off.

One particularly galling gimmick is when a company or agency or individual (our professional term for such parties is “industry jerk”) tries to be as kind as to “waive the cost” of their financial reviews.

See this example below:

 

This “Limited Time Only” has been going on preeeety long. Go figure

 

What’s wrong with these kind folk that are waiving the cost of a Financial Review?

 

Most of the time, it is given as a “free” service anyway. Mention to any financial planner within earshot that you wish to have a Financial Review done – there will be scores that appear out of the woodwork, all more than grateful to do it for free. Some will even parachute down from the heavens just to have that opportunity.

And the reason reviews are free is that it is the gateway to more sales. Unfortunate but this is the way our industry operates. Financial Advice is “free”, but the profit margins are built into the products to cover the cost of giving that advice. (ie commission)

Therefore it is particularly galling that industry jerks prey on the general ignorance of the layman and claim to waive off the cost of conducting a financial review.

 

Its really like dining in a restaurant and they graciously offer you a place to sit. For free, because they decided to waive the cost of seating. Pure. Bull. Shit.

If ever you receive such an offer, it is imperative that you wave them off with your middle finger of choice and optionally tell them where they can shove their kind offer.

 

 

*Disclaimer* While there are certainly instances where people willingly pay for thousands of dollars for a financial review, those are usually complex and involve a host of moving parts like trusts, businesses, and complex legacy planning. For the man on the street, who is a regular salaried worker, there is no need to shell out money for a Financial Review, unless said person is feeling particularly generous.

 

Next Steps

 

You’ve gotten a great financial review under your belt, and received several recommendations for what policies to purchase/change out. What next?

 

If you feel comfortable with your advisor, then by all means take action! Accidents, mishaps, and catastrophic events are rare – unless they happen to you unexpectedly. Since you can’t predict the future, any moment left unguarded is one more chance for misfortune to strike.

If you want to get a second (or third, or fourth) opinion, then by all means request for another review by another agent. See which courses of action make more sense to you, and suits your budget. At the end of the day, you need to be comfortable with the decisions made, because they may have a profound impact on you.

 

 

Have you ever had a great / terrible review experience? We want to know more about it! Let us have all the details in the comments section below, and leave us any burning questions too.

Till then, stay safe and stay informed!

 

www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.

We are also in the midst of building a top-secret new platform that will change the way people view financial planning. PS. It does not contain lame hyperboles like “fintech” or “insurtech” or “machine-learning” or “AI”.

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