Ryan Mellor, Sales Director at RMT Group interviews financial advisor George Kapositas at Professional Capital.
IFA Direct Home: Can you tell us a bit about your background?
George Kapositas: I have been working in the Financial Services Industry straight after University having worked for Friends Provident and NPI before becoming independent in 2000. I felt that the best way to look after private clients is to be truly independent where your employer is your client.
IFA Direct Home: Who should be seeking advice?
George Kapositas: All people need advice. Over the past years, we have seen Western Governments reducing gradually Social Security Benefits while Global Corporations moving from the gold standard Final Salary Pension Schemes into Defined Contribution Pensions, effectively removing risk from their balance sheets and passing it on to employees. Now people have to shoulder risk, leaving people with no choice nowadays but to make private provisions throughout their lifetime and make sure their assets last post retirement. Workplace Pensions have become compulsory in the UK after being imposed by UK legislation onto the private sector emphasising again the importance of building up personal savings.
IFA Direct Home: Why should they seek advice over making a decision themselves?
George Kapositas: People can make decisions themselves and particularly with the advent of internet and so much free information people can find useful information about investing money.
However, the role of a professional Financial Adviser is different. A financial adviser would help people become the architects of their life first before start investing money and putting plans in place. Would help people articulate goals, ambitions while he would manage their assets in a such a way that life objectives are met whilst protecting them for future generations. He would also be a life guardian, as a kind of lighthouse keeper, scanning the horizon for issues that may affect the client and keeping them informed.
A professional financial adviser is a good listener. The emotions triggered by financial uncertainty are real. A good adviser will listen to clients’ fears, tease out the issues driving those feelings and provide practical long-term answers. A good adviser will also be a good teacher. Getting beyond the fear-and-flight phase often is just a matter of teaching investors about risk and return, diversification, the role of asset allocation and the virtue of discipline. Even when the strategy is in place, doubts and fears inevitably will arise. At this point a good financial advisor becomes a coach, reinforcing first principles and keeping the client on track.
Now, more than ever, investors need advisers who can provide client-centred expertise in assessing the state of their finances and developing risk-aware strategies to help them meet their lifetime goals.
IFA Direct Home: What financial pitfalls might people come across?
George Kapositas: Financial Planning is people’s life journey with ups and downs and constant changes in legislation, markets and politics. These changes represent risk but also opportunity. The global financial turmoil of recent years (2008) demonstrated the value of an independent and objective voice in a world full of free internet information, product pushers and salespeople.
IFA Direct Home: Can you explain the process of receiving financial advice?
George Kapositas: The purpose of a client’s financial plan is to fund current and/or future life objectives. Our process includes an analysis of: Life goals, Current and projected net worth, Cash flow, Income & estate taxes, Employee benefits, Current investment & retirement statements, etc. from which we can glean the necessary information, needs for current income or liquidity, the appropriate allocation of investment assets and risk tolerance which we believe are the most important components in developing a successful financial plan.
From the data provided, we will develop a financial lifestyle plan containing our analysis with observations and recommendations to meet our client’s specified objectives.
The financial plan is a living document, reviewed periodically and adjusted appropriately. Whatever the unique situation may be, everyone needs a periodic assessment of where he/she is on the road to meeting his/her life goals.
IFA Direct Home: Do you find that a client’s initial objective changes following their first meeting with you?
George Kapositas: Not usually, but as we all know life is full of ups and downs. That is why all plans we put in place are flexible and adjustable.
IFA Direct Home: How much does advice cost?
George Kapositas: The first consultation is free as it is important to establish if and how we can add value to our client’s life. The fees are a % factor charged on assets we look after and agreed with our clients.
IFA Direct Home: Isn’t it a catch-22 situation to be spending money to find out how to save money?
George Kapositas: A client that works closely with a professional financial advisor can end up on average with 3 or even 6 times the value of assets than that if he had done it all alone. I was told that by a professional advisor/personal mentor when I joined the industry in 1993. Now, 25 years down the line I have seen this with my clients. For those who still have doubts they can speak to my clients.
IFA Direct Home: How often do you review the financial situation with your clients?
George Kapositas: Reviews are decided between us and our clients. Sometimes it is annually and sometimes every15/18 months. However, clients have access to me 24/7.
