Financial Planning is NOT...
I met with a great couple the other day. As we chatted, I asked if they had a financial plan- “ah yes, we think we do….” was their answer, so that means no. We discussed some additional items and it became even more clear that their investments, insurance and current advisor were not coordinated and planned out well. I see this again and again with many prospective clients regardless of their age and their net worth. It is a common problem and it frustrates me. This is not their fault and I don’t blame them one bit. After all, how are they to know? It is one thing if a person knows that they have “some investments” that a stock broker, registered representative or insurance agent placed them into (or worse yet, sold them). Their expectations are correct that it is simply an investment relationship. However, it’s another thing if people believe they are getting more service, like a “financial plan”. In reality they are majorly under-served while likely overpaying and worst yet headed down a dangerous path. Let me explain.
Financial planning is NOT a 1x event. A financial plan is a living, breathing plan that updates with the twists of life and the many different stages you encounter. It is an ongoing process. It is online and readily available to review.
Financial planning is NOT a product, investment or stock that you buy. These should be seen as the potential vehicles for your unique situation (if appropriate) to make your plan work correctly, not the miracle cure (since the “last thing we tried didn’t work”).
Financial planning is NOT a vague ideal or attitude such as, “save as much as you can and we will figure out what you can do down the road.” Sadly, I have heard of other so called “advisors” saying things like that. Here is the truth… financial planning is rooted in your goals and what is truly important to you!
Financial planning is NOT a huge stack of papers that lists of 15 things to immediately do (mostly on your own). Good planning is accomplished in a modular method, one manageable step (or two) at a time. This is realistic.
Financial planning is NOT a quick or easy strategy. It takes expert advice, patience and good habits over time to reach success. You need a qualified and competent advisor to help you realize your goals.
Remember a good and useful financial plan starts with what you value. What you value should naturally direct your goals. And your goals then dictate what investment, insurance, tax, estate methods we use to help you achieve success in your plan.
To your Financial Plan,
Luke Fields, CFP®
Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James. Expressions of opinion area as of this date and are subject to change without notice.
Sketches are courtesy of BehaviorGap