Dentists Who Invest Podcast
Official Podcast of the Dentists Who Invest platform. Talking all things investing, money and finance with a dental spin. Have you ever wondered how you can grow your wealth and protect your hard earned money as a Dentist? We've got you covered. Featuring famous guests such as Andrew Craig, Edward Zuckerberg and Benyamin Ahmed we delve deep into EVERY aspect of finance to educate and empower ALL Dentists.
Dentists Who Invest Podcast
Here's What Dentists Need To Know Before Taking Financial Advice with Anick Sharma
If you’d like to discuss your finances with a professional, you can connect with Anick here: https://www.viderefinancial.com/contact
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Your financial future deserves more than a menu of investment products. But how can you tell whether the advice you are receiving is truly in your best interest or just a surface-level recommendation?
In this episode, Certified Financial Planner Anick Sharma unpacks the confusing world of financial advice, explaining the real difference between financial advisors, wealth managers, and financial planners. While Independent Financial Advisors (IFAs) offer a broader range of products across the market, many others operate under restrictions, recommending only from a limited panel, often at higher cost and with narrower relevance.
We discuss why wealth management typically focuses on investment portfolios alone, often overlooking key life goals and broader financial context. In contrast, true financial planning takes a holistic approach, mapping out a clear route from where you are now to where you want to be and ensuring your money supports what matters most in life.
Anick also highlights one of the most dangerous misconceptions: that “low-risk” portfolios are always the safest choice. In fact, if they fail to outpace inflation, they may quietly erode your financial future. As Anick puts it, “There’s no point going to the grave with a great big stack of money. You're just going to make the kids rich, not necessarily yourself fulfilled.”
So how can you tell if your adviser is offering genuine financial planning or simply selling a product? Ask the right questions, like “When can I retire?” and “What assumptions are you using to get there?” and see if they can answer with evidence and clarity, not just jargon.
Whether you are at the beginning of your financial journey or planning your exit strategy, this episode will help you ask better questions, demand better answers, and take more confident control of your financial future.
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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.
A lot of us have financial advisors or we're considering financial advice, but what do we need to know to be able to tell when we're getting a good deal versus not getting a good deal? I'm joined today by Mr Anick Sharma, financial planner. We're going to be talking about the ins and outs of what you need to know when it comes to the terminology of financial advice, what you can use and say in order to figure out if your financial advisor is giving you an amazing deal and giving you the deal that they should be, and also give you some specific questions right at the end of the podcast that you can use and ask your financial advisor so that you know that they're on the ball.
Dr James:I think it's important to distinguish between the terms financial advice, financial planning and wealth management, because this is something that I see people conflate and it doesn't always mean the same thing, right?
Anick:Yeah, 100%. So I think the starting point is most people seek out financial advice. They want to take recommended advice what they should do, based on their financial affairs and to get to a certain point in the future. Now the avenues to explore there are a lot, essentially. So, from the top, most people will know the term independent financial advisor, ifa. So in a traditional IFA will, let's say, you, james, come to me, you want help with a pension or investment. So if I'm an independent financial advisor, I say, okay, I can look at the whole market, I can give my unbiased view of what you should do and I will recommend a certain product or an investment strategy. So that's one form of financial advice. There's a slight offshoot off that you can have restricted financial advisors. So again, you might come to me saying you want help with your pension or investments, but I work for a certain national firm or some big national firm and I can only give advice based on their range of products. So it's really narrowed and restricted there. That can often come with higher costs and you could argue it doesn't have your best interest at heart. Now, within that financial advice or within that independent financial advisor space sorry, you can then have some financial advisors who go on to become wealth managers. So a wealth manager will look at a integrated strategy, typically between the investment side look a bit more at tax but the best way to think about wealth management is it's a sub-sector financial advice with more of a emphasis on the investment portfolio, where they will look at things such as asset allocation, investment strategy, portfolio management and rebalancing.
Anick:So we've covered independent financial advisors so far, wealth managers, financial planning is. It sort of ties it all in together. So financial planning is a comprehensive process and journey. It's essentially life planning and goal setting over short, medium and long terms. Your listeners I'm sure if they've heard me before, will know about point a and point b and mapping out the differences um. And that's what financial planning is. It maps out where you're at the moment point a and where you want to get to point b um and based on that it looks at the strategies and interventions that may or may not be required to get there. Financial planning is encompassing. It looks at that holistic perspective and so financial planning includes wealth management but addresses wider financial needs such as budgeting, saving, investment, investment management strategies, retirement planning, tax planning, risk management, estate planning, planning, tax planning, risk management, estate planning, monitoring, reviewing and more and then within risk management you can.
Dr James:There are so many different pieces there, so hopefully that gives you a bit of a flavor of the differences it does, and then to pull that into practical terms that people experience, I suppose, whenever they're going on their financial advice, financial planning journey Wealth management, in other words is when the advisor takes your money, invests it in a portfolio of assets that they've worked with you to select. However, the planning component is more along the lines of okay, we've had all this money, we've had all this growth, now how can we think about how to be tax efficient, as you were saying a second ago, and how can we also think about drawing some sort of recurring income from these assets whenever we hit retirement age?
Anick:Yes, in a nutshell.
Dr James:It's another way of saying it right, because this is the thing. Obviously, it's one thing to be able to grow someone's money, and really that's where it can be argued that someone can potentially handle some of it independently if they feel comfortable. Of course, not financial advice or anything along those lines but where it really is worth getting a professional pair of eyes is when you get closer and closer to retirement age and you're thinking to yourself okay, cool, now I need to think about how things are structured as much as anything else and begin to draw some sort of income from my assets, some sort of residual income, because that is a whole, entire different kettle of fish. That's more an art rather than a science. And here's the thing I mean.
Dr James:Whenever it comes to any transaction, you want to be on the better side of the deal before you say yes to it. I mean, in that situation, a financial planner will be able to generate you so much more in return that it's just not worth the effort. So therefore, it can be a good idea, of course, a good financial planner as well. Just emphasizing that. Have I got that right?
Anick:yeah. So there's a. There's a load of research that demonstrates the value of holistic financial planning and it can make such a huge difference. You made an interesting point there about additional returns. Like someone who just focuses on the, the traditional financial advice piece will speak about returns and growth, which is, you know, we need that portfolio to power the plan.
Anick:But I'd flip that on its head and say, okay, I've had situations where clients come to me and say I think I want one million pounds of my pension. Okay, fine, no problem at all. We can create a strategy. Look at the asset allocation, rebalancing, contribution amounts, all these sort of things. But but what are you going to do with that £1 million? Because most people don't actually care about how much is in the pension or whether it's a pension or some sort of account or what the investment is. It's about what they do with it. How will that £1 million help you, mr Clines, to achieve the life you want? To take the kids on holiday, to travel around the world, to go on cruises, to take that once-in-a-lifetime safari trip, whatever it might be, because that's where the juicy life bits happen. Let us do all the geeky, nerdy things about calculating rates of returns and all those sort of things Interesting.
Dr James:And then you know one other thing, just to circle back to something that I was saying a second ago yes, Interesting. And then you know one of the things, just to circle back to something that I was saying a second ago, yes, I mean, here's the thing, Denison Invest is very much set up with encouraging people or helping them or demonstrating at least that you can go down the path of managing your investments, potentially in some situations independently. But you know what I've learned since then? I mean in practical terms, because most people are so busy. From experience, I mean, whenever I look into people's portfolios, whenever it kind of comes up in conversation, it's probably about 5% to 10% of the time that I think to myself right, this person has actually nailed it, Like they've really understood this, it can be done. But you just have to weigh up to yourself Do I, in practical terms, have the time to be able to invest, to learn how to do this, and that's where it can make sense to at least get an opinion, regardless of what stage you're at on your financial journey.
Dr James:That was something that I learned, because back in the day when I figured out how to put a tracker fund in my ISA when I was like 25 and I was like, oh, it just makes so much sense, and I thought that everybody would uh, get it. But what I have to remember is probably took me like two years to figure out how to do that in and of itself. So listen, what I'm saying is it's food for thought. It's definitely not black and white and, at the very least, it's better to make some progress rather than none at all. And if you're gonna do it, then do it right. One thing I was also going to add on as well I think a big misconception I'm interested to hear your take on this, Anick big misconception. People think that if you have the wealth management side of things, that's fine, as in someone's investing money and assets in your behalf. They think that the planning piece on top will cost more because it's more service. But that's not always the case at all. Right.
Anick:Yeah. So it depends on how it's structured in terms of the that person's charging fee. So let's take a step back a moment. Traditional financial advice, your wealth managers, your traditional ifas well, they will give or ask product-based questions such as which pension, which investment, which insurance policy, wherever it might be. Now, financial planning essentially aligns capital with what's most important to you. By capital, I mean time, money, energy and attention. So financial planning will answer those questions, but they do so within life's bigger questions, such as when are you going to be financially independent? Are you on track? Are you saving enough? Do you have enough? What even is enough? Will it all be okay? Because, fundamentally, time's our most precious resource and life, and our financial decisions should be about getting us closer to a more fulfilled life and getting us close to that point. Really, money is just the fuel for that journey, but not the end goal itself, and it's a tool to get there. Real wealth is all that time, memory, moments with those that mean the most to us. So, by creating that financial plan first, which, using a cash flow model, typically chart your trajectory into the future and come back into the present, which tells us how we should allocate our time and resources. Essentially, life isn't a rehearsal, so getting that right is it's critical.
Anick:I've spoken about it before. But that financial planning piece, coming back to your question, james it's a bit like setting off on a car journey from London. You know you want to get somewhere at some point, but if you haven't taken the time to find that route then it's so easy to become lost. And if I don't know, you set up Google Maps and your phone dies. There's life throws, there's inevitable curveballs. A road diversion happens by not checking in regularly. It's really easy to become lost and off track.
Anick:So, within the context of you know you mentioned financial planning and then the investment piece. It's so important to do the planning first because the I said it momentarily ago the portfolio powers the plan, so we need to set our stall up where we want to get to and then make sure the tools are adequate to get there. Now, in terms of planning costs, do more. Quite a lot of professionals will attribute their fees to the financial planning, but in the investment management side of things it is. It comes along with it, and that's why it's really important to understand the different structures. Some people charge fixed fee versus percentage base, so there's no fee attributed towards those assets under management.
Dr James:Essentially, it's just something to be mindful of and to watch out for just on the planning piece you're referring to just a second ago and how having a goal and objective is so important. There's a quote by Seneca that I absolutely love, and that quote is if a man knows not to which port he sails, no wind is favorable. Heard it?
Dr James:maybe one or two times have, I have I said it before the forecast, I probably have. I've only got so many quotes and uh, yeah, maybe I should freshen up and get a few more in my repertoire. But there you go, I really you go. I really liked that one, I really liked that one. Worth saying again if I've said it before, that's for sure.
Anick:Anyway, you're right, sorry A hundred percent, unless we take the time to define that point and and think to ourselves what does ideal look like? What, what future do we want to hit? It's so easy to get caught up in in the grind, essentially I. It's so easy to get caught up in the grind, essentially, of I've got to do X, y and Z because everyone else is talking about it. But look, we've spoken about situations before where people have been caught up and they've been able to retire, but they haven't taken the time to define that point B of what the future looks like. And the time is so important we're not getting any of it back um, so we can't afford to wait to see what may happen cool.
Dr James:Let's talk about the regularity side of things, because I believe financial advisor is a protected term, but financial planner isn't right yeah.
Anick:So to give financial advice you need to be on the FCA register. So that basically means you've been signed off and you're allowed to give regulated financial advice. So someone embarking down this journey, at the very least, if you come across someone you might want to work with, check them out on the FCA register. If they are not on there, that is one gigantic red flag. Yep, um, check the qualifications too. Um, most financial advisors will have a thing called a diploma. That basically means they've passed a few exams to give advice. Others out there might be chartered, certified, fellow, etc. It doesn't necessarily mean they are better than a diploma, but it's just things to look out for. Now the regulation comes within actually giving advice some well, financial planning using cash flow modeling and not all people do that and unfortunately it's not like regulated by the FCA. Yet I've been. I actually wrote an article about this in the Financial Times a few months ago because I think it should be regulated. I love cash flow modeling. I love the assumptions and going to town with all that granular detail. Um, it just needs more of a widespread awareness of how sensitive those inputs can be. Um, so just make sure people are doing cash flow modeling. If you go down this journey, make sure they are an fca register qualified to give regulated advice.
Anick:Have a look at their approaches to investing. Um, ideally, you don't want someone who's making active speculations or knee-jerk reactions to market movements. Um, an evidence-based investment philosophy. Uh bases an approach on Nobel Prize winning academic literature. Look at people's approaches to life as well. So our view is that we want to see the Czechs take a bounce at age 100, because that's a life fulfilled and a load of good stuff happening. There's no point in going to the grave with a great big stack of money. You're just going to make the kids or the next generation rich and it's not really fulfilled life. Essentially.
Dr James:I like that. One more thing just to round off on this, just popped into my head while we're talking Can you give the audience some questions that they can ask their financial planner slash financial advisor so that they know that they're getting a good deal, some things that they can ask to basically suss out what's going on.
Anick:Yeah, if someone's nearing retirement, ask them when can I retire?
Dr James:Because if someone's just giving financial advice, I mean it probably does sort the wheat from the chaff right 100%.
Anick:If someone's just giving financial advice product-based there's no way you can know the answer to that without the context of a financial plan and cash flow model. And someone who does that for cash flow modeling piece should be able to say we think you can retire at this point. If they ask that question, then follow it up by saying what are the assumptions you're basing that on and tell me how reasoned they are. Because if they start tap dancing and can't evidence their assumptions, then that's a huge red flag and something to be mindful of.
Dr James:there they're probably the two biggest ones they're the biggies right, and even even though those seem fairly, fairly obvious, like an answer that they might have at hand, it's, I mean until, as you say, until someone conscious of numbers, which doesn't happen as much as it should do. There's just a whole lot of people who are receiving advice, but only receiving the wealth management component, right when they're investing their money that they can't possibly know, even though that you would, you would, it would be implied that that is their job, right?
Anick:A hundred percent and then ask about fees as well, if they. They should be absolutely transparent about it. Some will charge a percentage as a initial fee. Some will charge a percentage ongoing. Ask them how much that's going to be If you're going to set up regular contributions. Ask them in pounds and pence and in percentage terms how much that's going to cost you, because as the pot gets bigger, proportionately so does your fee. Is that fair? It's not for me to say, but it's for someone to do some analysis and see what they think about it. Have a look at those that charge a fixed fee. Ask them how they operate.
Dr James:Um, yeah, there's another one I chuck on top as well when it comes to risk inverted commas, risk in the portfolio because this number of people I see who are miles off from retirement like 30 years in low risk portfolios, and I get that.
Dr James:The financial advisor slash wealth manager, slash wealth planner. Financial planner does their due diligence beforehand and they fill out the risk questionnaire as part of their assessment right, and a lot of people are sitting in low to medium risk inverted column portfolios, which really means low to medium volatility portfolios, which actually means low to medium returns as well. Right, and really, you want your investment portfolio to outpace inflation by the greatest margin possible, but also be invested in assets that have a lot of historical data to demonstrate growth. So therefore, if someone is in a low risk portfolio, it's also a low returns portfolio, which means that your retirement, your money, is quite literally not even like pacing inflation sometimes in terms of growth, which means that you'll never get to retire. So, in a weird way, the low risk portfolios are actually the high-risk portfolios, because if we define risk as never achieving retirement, that's the most likely to cause you to be in that scenario by the end of it.
Anick:James, you're going to trigger me here because I have such a bugbear with the profession. So anytime people open first of all, thanks, yeah, great reminder. Anytime people open an investment account, they might be greeted with a question that says what sort of investor are you? And throw out meaningless descriptors such as safe, cautious, adventurous, moderately adventurous. Me as a professional. I look at this and think at face value initially. So any human thinks I don't want my money to be aggressive, so what am I doing there? But then I put my financial planner hat on and say you know what? They're, attributing their risk to volatility I how much the market goes up or down over a period of time. So, using their definitions, if I stuck everything as cash in my pension for 30, 40 years because I've taken a safe and for those listeners I said safe in inverted air commas there over the next 30, 40 years, then that's fine. My retirement fund's sorted, absolutely not. Inflation is going to rip it a new one over that time. If cash is paying three inflation's at four money's going backwards by 1 percent every year, compounding over 30 odd years, that's a gigantic number. All of a sudden I'm now in retirement. My money can't fund my retirement peak earning years have gone and it's in a really tricky situation.
Anick:Volatility is a function of markets and capital markets reward long-term discipline. Really important to get that on board. If you're going down this journey, ask your financial professional how do you define risk? Because that is so important. If they just use a questionnaire, alarm bells would be going off in my head.
Anick:Using a three-pronged approach to risk is a portfolio selection so important. So risk need looks at what is the mathematical return. We need to deliver our plan and that's the most important construct without a doubt, because it's objective. Once you map out point B, you can come back to the present and say I need to target return of X to achieve this future Fantastic.
Anick:The second is risk capacity, and that's our ability to withstand short-term losses, and that depends on the short, medium, long-term goals if you've got certain things to plan for. So that needs to be factored in as well. And the third is how we feel about volatility. It's all well and good to be creating the perfect portfolio on a spreadsheet, but if you're not sleeping every night because you're worried about it, then there's a conversation to be had and typically that third piece is a questionnaire. It's psychometric but that has that has flaws in itself. If you've just had a huge argument with someone before doing this questionnaire, you're going to be not in a good mood and it might reflect pessimistically in your answers, which then might impact your portfolio selection over the next 40 or 50 years. So yeah, just just be careful with that sort of thing.
