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Should you be friends with your financial planner?

Is it ok to be close friends with your financial planner?

You might believe that becoming good friends with your financial planners over the years is a natural process.

They have got to know you, your family and you add them to the guest list for milestone birthdays and even weddings. You look forward to being taken to expensive restaurants by your planner every year.

But being too close can be risky.

“It’s important for financial planners to have deep and meaningful relationships with their clients but it needs to be professional,” explains Dacian Moses, president of the Boutique Financial Planners Association.

You do want your financial adviser to be brutally honest about your financial behaviour, not to step around it because you are friends.

One of the risks of being too friendly is that if returns are poor and fees are high, you may be inclined to put up with it and not jeopardise the friendship.

The role of a financial adviser is to produce results by organising your investments, insurance and estate planning.

Your wealth depends on it and if you are retired, the quality of your retirement relies on the income the planner is producing from your assets.

Trusting your financial planner is essential.

You want them to listen to you, understand your financial goals, provide factual financial advice and get you good performance from your portfolio. It is all about the numbers.

Moses says that he has clients that stretch back 15 years and over that period he has developed some close relationships with them and their families.

“But the intention at the outset was to understand them and provide advice.”

So if you are linking in your financial planner through Facebook or Snapchat or Instagram, think again. Would you invite your doctor to be a Facebook friend? Apply the same rules to your planner.

“I’m not interested in being friends with clients on Facebook. I see Facebook, Snapchat and Instagram as unprofessional. LinkedIn is the appropriate forum to be friends,” says Moses.

Moses says polite social mores are important and these can be compromised on social media. Social media invites people into your private life and you into theirs.

It could potentially get out of control and harm rather than foster a relationship with your planner.

Written by Susan Hely

Susan Hely

Susan has been a finance journalist for 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited ASFA's Superfunds magazine and wrote the best-selling Women and Money.

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4 Comments

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  1. I slightly disagree with this, as whilst yes Facebook, Snapchat and Instagram can be seen as “unprofessional” (particularly snapchat), I see no harm, or detriment for having your clients on the business Facebook page. Yes Linkedin is the professional space and a great place to network amongst professionals, not all clients will be on Linkedin. Social media offers the financial planner (if done in the right and professional context) a greater opportunity to connect not only to his direct clients but to future clients as well. It only takes one of your clients that have liked your business Facebook page to share it, or some content you have just posted to a friend of family member and you’ve got the very real possibility of a new client.

    • Hi Calvin,

      By ‘Facebook friends’ we mean a client connecting with a financial planner’s personal profile, rather than following their company page, which, as you say, is a great promotional tool.

      – Money team

  2. I would like to know the best way in which to source a great, reputable financial adviser. My partner and I need to start building our finances and would like to look at buying a house towards the end of the year but being first home buyer would need some guidance and a decent financial planer.

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