Posts Tagged ‘Financial Planning’

Financial Planning Helps You Feel In Control of Your Financial Future

June 5th, 2021

Some of my friends need to hire a professional to help them design a financial plan, but some of them can get far down the road with a little time, a little diligence, and a trusted friend who can help because he or she has already gone down that road.

Here are some tips I give my friends to help them figure out if their financial planner has mixed agendas:

- Is he wearing lots of diamonds and Bruno Magli shoes?

- Is she driving a $90,000 car, but you caught her talking about having a hard time paying her credit card bill?

- Does he charge a fee, or is he paid by commissions from sales?

- Does she appeal to your selfish side, focusing on the indulgence you can enjoy if you have a lot of money, or does she ask about what matters most to you?

- Does his offer seem to be prepackaged, one-size-fits-all?

- Does she use any pressure to get you to buy a product?

- Is he as slick and the proverbial used car salesman, always smiling and promising, glossing over details and moving in for the check?

According to Certified Financial Planner Board of Standards Inc. (CFP Board) research, more than 40 percent of Americans do not feel in control of their finances. If this sounds familiar, a professional financial planner might be able to help. Knowing what to expect as a client and what constitutes a healthy and productive financial planning relationship will put you in the driver’s seat when it comes to taking control of your financial future.

Working with a qualified adviser can be a financially valuable and emotionally rewarding experience. Trust between you and your financial planner is one of the key ingredients in a successful financial planning relationship.

To find a professional you can trust, ask friends to tell you about the professionals they use, and look for someone who is genuinely interested in his or her clients’ goals. Interview two or three before you decide. (You may find that a friend’s perception of his professional is very different than yours!) Don’t settle on someone until and unless you’re convinced he or she values what matters most to you, doesn’t use slick presentations, and doesn’t over-promise. Remember that the professional’s role is to give you advice and assistance, but you retain responsibility and control of your decisions. Don’t invest in anything unless you clearly understand the risks and potential rewards. In other words, every time you commit resources, the investment and risk has to make sense. You can try a professional for a while, but you aren’t married to this person. If, at some point, you don’t feel that your visions for your financial future are compatible, or if the professional seems to forget what matters most to you, find someone else.

Here are some of your basic rights that as a financial planning client:

Before engaging you as a client, your financial planner should discuss your goals and objectives with you and explain what you can expect from the relationship.

Your planner should explain all risks associated with his or her financial recommendations and identify any potential conflicts of interest.

Your needs should be the focal point of all recommendations made by your financial planner.

Your planner should demonstrate the knowledge required to offer financial planning advice, such as attainment of the Certified Financial Planner™ certification.

A planner should never divulge your personal and financial information to anyone. Some acceptable exceptions are: sharing it with other professionals to conduct business on your behalf, at your consent, or when mandated by court opinion or law.

Your planner should not provide investment advice or stock brokerage services without the proper license to do so as required by state and federal law.

Use the following checklist to evaluate your existing financial planning relationship. If you are not satisfied with the services you are receiving, assert your rights by discussing your concerns with your planner. A competent, ethical planner will seek to understand and meet your needs and will explain the reasons behind his or her decisions and actions.

Items to look for:

My planner is diligent in carrying out his or her activities.
My planner responds to my phone calls and requests promptly.
Recommendations are appropriate for my situation.
I understand what I’m being charged and why.
I understand and accept my planner’s conflicts of interest.
My interests drive the decisions being made.
I’m involved in decisions at the appropriate time.
I do not feel pressured to make certain decisions.
I receive adequate information to make good decisions.
My planner investigates the products he or she recommends.
I get the service or products I paid for.
My planner presents his or her qualifications or abilities honestly.
My financial planner’s staff is properly supervised.
My information is kept confidential.
Trust is the most important ingredient in any relationship. If you’ve found someone who can help you chart the course for your financial future, treasure that person. If you haven’t looked for that person, start looking. If you’ve looked but haven’t found someone you trust, keep looking. Don’t stop until you find someone who wants to help-with no hidden strings attached-and is genuinely concerned about what matters