YBC Academy : The Employment Contract
You have now reached the point when you are ready to take on the 1st person to help with your growing business. They can be a full time employee or an intermediate category known as a worker which means someone who has a service contract rather than an employment contract to work with you. How to determine this is a subject for another article on employee status. However both categories need a contract and from April 2020 this contract needs to be issued either before they start work or at the latest the 1st day of employment.
Previously the conditions set out below must be included in the contract:
Do you understand the world of financial planning? Most people don’t, which is why I decided to write a series of blogs/Articles regarding financial planning, and our role in your life/business.
For your reassurance, I’m a Chartered Financial Planner and work with individuals and businesses to understand and plan their finances in order to make better, informed decisions.
What are the Common Perceptions of Financial Planning?
The best way to start this series, is to focus on the common perceptions that people have when considering financial planning or getting financial advice.
When looking for a financial advisor, you might think:
• “They’re all just chasing commissions.”
• “What does that even mean? I don’t understand any of this financial gibberish.”
• “I don’t understand why this is so expensive? Are they after my investments?”
• “Can I trust them?”
• “Do they have my best interests at heart?”
To be honest, I can’t blame you for having these thoughts. These perceptions have been created because of many people’s experiences with financial advisors and our industry, in general.
Why do Financial Advisors and Planners have a Bad Reputation
The truth is, the vast majority Financial advisors or planners aren’t bad or out to get your hard-earned money and genuinely want to do the best for their clients. It’s unfortunately just the way that they’ve been trained, me included ☹, so the perception often differs from the reality.
Financial Advisers can often (without even realising) talk in jargon, meaning that your understanding of the service and experience of financial advice is marred by a language that only we seem to understand.
The service may feel quite impersonal, because a lot of financial advice tends to be transactional, for example:
You book a meeting with a financial advisor because you want to address a need – a pension or an investment, and that is okay when meeting with the adviser for the first time. However.Meeting potential subsequent tends to be focused around the product until some sort of conclusion is reached. Again, this is not necessarily all the advisers’ fault. It is/can be, in part,down to training but can also be a genuine fear, for some advisers at least, that when you notice potential gaps elsewhere in a clients financial planning, bringing these to the client’s attention may cause the client to believe that their adviser is simply looking to get more out of them. Again, this isn’t necessarily true.
At this point, your mind would automatically default to those earlier questions – are they just looking to charge me a commission? Will they consider my circumstances?
And this is the biggest problem with transactional advice, and the experience many client may have had. Transactional advice is almost always one-size-fits-all: a problem needs to be resolved (something that needs to be completed or sold) and here is a copy/paste solution.
Another problem is that if you don’t understand the advice that you’re receiving, you will often feel forced into agreeing to a service, and then later feel resentful and possibly even hoodwinked. You haven’t been guided or assisted in a way that you feel comfortable with.
At this point, you may feel that the advisor is looking to set up any kind of agreement, just in order to charge a fee; and because of his use of his technical knowledge, often to impress the client, he is able to justify the fee that he is charging.
Sadly, this is the way that many advisors have been trained to deal with clients. And this is why the perception still exists.
We Don’t Do Copy/Paste Planning
We know that clients don’t want that. They want to understand the product that they’re investing in, and have their circumstances understood. They want to trust their advisor and feel listened to. They want to feel like they and their assets are being looked after and that whatever action the advisor takes is in their best interest. They don’t want to just be sold a product.