A financial planner or personal financial planner is a professional who prepares financial plans for people. These financial plans often cover cash flow management, retirement planning, investment planning, financial risk management, insurance planning, tax planning, estate planning and business succession planning (for business owners).
However, when new or potential clients say to us, “We have a financial planner.” Our follow-up question is, “Did the financial planner sit down with you and take the time to educate you on a financial strategy that is tax-advantaged, pays for cars, houses, can fund for college, AND leave behind a legacy for your grandchildren?” The answer is ALWAYS, NO!
Why accept that if you don’t have too? Over the next week, I’ll be sharing some insight to the financial planner arena and what they SHOULD be doing, but probably are not doing. I’ll be sharing steps 4-6 on Wednesday, but find out the top 3 now.
Financial planning should cover all areas of your financial needs and should result in the achievement of each of your goals as required. The scope of planning would usually include the following:
1. Setting goals with the client This step (that is usually performed in conjunction with Step 2) is meant to identify where the client wants to go in terms of his finances and life.
2. Gathering relevant information on the client This would include the qualitative and quantitative aspects of the client’s financial and relevant non-financial situation.
3. Analyzing the information The information gathered is analyzed so that the client’s situation is properly understood. This includes determining whether there are sufficient resources to reach the client’s goals and what those resources are.
Is your financial planner creating a strategy for you, that you’re proud of?
If not, then come and get another opinion.