I like to think I’m a self-taught money manager.

Yes, I’m influenced by basic money principles my mom taught me, and Introduction to Finance class in uni. But overwhelmingly, most of what I know about managing money comes from self-study and practice.

I’m mostly like this in other areas of life too — whether it’s career, fitness, or hobbies. I’d rather read 50 articles online and buy a book, instead of paying an expert to teach me.

Given the circumstances, I think I’ve done okay.

But maybe this independent streak of mine; believing I can learn anything from the Internet is sometimes a weakness. Actually, it’s kinda arrogant. And if there’s one thing I’ve learned about growing older, it’s you don’t have that much time to DIY anymore. Oftentimes, the smart thing to do is work with an expert, a professional.

So recently, when a friend who’s an Independent Financial Adviser asked if I wanted to go through a one-year financial planning journey, I decided to ditch the “I can do everything myself” act. I said “Yes.”

Here’s what I learned along the way.

What a Licensed Financial Planner Can Do for You

If you’ve explored getting insurance/investment before, you’ve probably heard of titles like “adviser,” “consultant,” “coach,” and “planner” being thrown around. Confusing eh?

There are actually several different licenses in Malaysia — each legally allowing an adviser to do certain things and use a certain title.

If you want the broadest scope of financial advice possible, aim for an “Independent Financial Adviser (IFA).” Which means someone who holds all the following licenses:

• Capital Market Service Representative License — for dealing in financial planning activities, by Securities Commission (SC). Having this license means someone can call themselves a “Licensed Financial Planner.”
• Financial Adviser Representative (FAR) License, by Bank Negara Malaysia. Having this license allows someone to recommend insurance products from any insurance company.
• Capital Market Service Representative License — for dealing in unit trusts and Private Retirement Schemes (PRS), by SC. Having this license allows someone to advise on unit trust and PRS investments.

(The entire licensing thingy is actually more complex, but to keep things simple, I’ll use “financial planner” and “adviser” to mean the same thing: An IFA who has all three licenses.)

What’s cool about this license combo is your adviser isn’t limited to recommending you products from just one company (vs an insurance agent who can only recommend plans from their company). An IFA is unbiased — they can help shop around and propose the best plan for you.

It’s not just limited to insurance and investment though. Your adviser can also advise on things like cashflow management, budgeting, tax strategies, and will planning.

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When I heard about everything we were gonna cover, I was pumped. I was keen to finally understand what a pro financial planner thought about my money situation, and what my blind spots were. Plus what would they say about my investments in Bitcoin?! 😐

Here’s what happened.

Month 0: Introduction

The first meeting is an introduction session, followed by 1.5 hours of “fact finding.” My financial planners (let’s call them CS) invited me to meet at their office, and I’m glad I decided to go.

Because the fact finding session is detailed. I would have struggled to fill up the Personal Finances Review spreadsheet myself, which covers important areas of your life including:

• Balance sheet (assets and liabilities)
• Cashflow management
• Estate, legacy & debts financial needs
• Risk management (insurance)
• Budgeting (annual and monthly)
• Investments
• Retirement planning

I was also revealing money details I’d never shared with anyone before, which was very uncomfortable. Hence, having that first meeting face-to-face was helpful.

Additionally, we discussed my overall financial goals, and I was given a bit of homework — to complete the spreadsheet with as much detail as possible, and do an investment risk profile assessment. (Result: Apparently I have average tolerance for investment risk. 🤔)

After the session, CS sent me a summary email, and let me know what to expect for our next meeting: discussing my financial planning report.

Month 1: Discussing the Financial Planning Report

Our second meeting was done virtually on Zoom. It’s better to have the meetings face-to-face, but I was super busy at work, and still cautious about COVID.

During this 1.5 hour session, we reviewed the draft of my financial report, which was created based on Month 0’s fact finding.

What I love about the process is you always have a chance to ask questions and discuss concerns. Your financial planner isn’t a dictator who forces you to do things with your money. Instead, it’s very consultative.

My Areas of Concern

• Emergency Savings: initially it seemed like I didn’t even have enough (6 months) of emergency savings. But I clarified that I actually had extra joint-savings with my family.
• Investments: My investments seemed to be overly conservative, with too much in fixed income assets.
  Recommendation: Tweak my portfolio to include more equities, via managed portfolios. Invest some of my EPF Account 1 elsewhere.
• Insurance: I already had 2x insurance policies, but the coverage wasn’t enough.
  Recommendation: Add another insurance policy.
• Will planning: I hadn’t set up a will, so if anything happens to me, it’ll greatly trouble my family.
  Recommendation: Set up a will asap.
  
  

What I Was Doing Well

• Retirement Savings: I was on track to retire at 55.
• Financial Ratios: My ratio of loan payments vs salary was comfortable. Other ratios (e.g. savings rate) were good too.
• Income Tax Planning: I was optimizing my tax reliefs well.

Overall, my score (based on my adviser’s scoring system) was somewhere between Poor and Fair; slightly below average. 🙁

(For comparison’s sake, Yi Xuan from No Money Lah had a way better score #jealous. Check out his experience here.)

Throughout Month 1’s meeting, it was very obvious my biggest interest is investing — I kept swinging the discussion back to that. But of course, there’s a lot more to personal finance.

We ended the meeting by discussing upcoming changes to my cashflow for 2021 (e.g. salary increments and additional loans), and family planning. For those of you with families, it’s better to do financial planning together with your partner.

Yes, your financial planner looks after your family too.

Post-Meeting & Action Plan

As usual, CS sent me an email summary after the meeting, with recommended action points.

I also received my 22-page Full Financial Plan, and am currently considering the recommendations on insurance and investments.

Should I sell all my bond unit trusts and move them to managed portfolios? Do I really wanna touch my EPF money? Hmmm…

What’s Next?

For Month 2’s Meeting (scheduled for January 2021), I can look forward to: Cashflow Management Planning.

The full financial planning journey is actually a 12-month process, shown below:

More from this series:

Revamping My Investment Portfolio With My Financial Planner (June 2021)

My Financial Planner (& Charges)

For my financial planning journey, I’m working with the talented team at Wealth Vantage Advisory (WVA). My personal advisers CS are also the people behind award-winning financial education platform MyPF.my.

Fees are:

• Comprehensive financial health check: RM 300
• 1-year modular financial planning: RM 1,500
• 1-year full financial planning: RM 3,000

The difference between modular vs full financial planning is the full plan covers all of the following: insurance, investments and estate planning. Meanwhile, for modular financial planning, you choose 1 out of 3.

Lastly, if you’re also interested in getting professional money advice, I’ve got just the thing for you. Sign up here (and scroll to the bottom) for a FREE consultation session with a licensed financial planner from WVA.

No obligations to take the paid services. So perhaps have that free chat and see if it brings as much value to you as it did to me? All the best!

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Pics from: Pexels

In the process of writing this, I received a complimentary 1-year full financial planning package from WVA. If you sign up for any of the paid services, I’ll get a small referral fee.