Everyone Should Work With a Financial Planner

Everyone Should Work With a Financial Planner

Jan 08, 2016

Life is full of surprises - from marriages, to having a baby, to planning for college expenses. Sometimes, life throws you curveballs, such as the death of a loved one or divorce. You can't always predict what will come your way, but that doesn't mean you can't be prepared. Today, more than ever, financial planning is critical to financial success.

"Financial planning isn't just for the wealthy. It's for everyone," says Eleanor Blayney, Consumer Advocate at the Certified Board of Financial Planners. "In a world where people are more responsible than ever for their financial lives, it's important that people understand the key ingredients to each phase of their life."

Financial Planning takes the guesswork out of managing your finances and helps you understand the implications of each financial decision you make. Everyone has different goals, so it's important to have a unique plan that works for you and your financial situation, both now and in the future.

How about the future? Ask any retiree living on his savings what he thinks of being the captain of his cash flow in retirement. You'll probably find that, far from feeling powerful and in control of his finances, he is anxious and bewildered by all the decisions he must make.

For this reason, having a relationship with a financial professional who can advise on the needed tweaks and adjustments over the course of retired life is as close to a "one stop, sleep soundly" solution as it gets. There are many components that the financial planner will be monitoring and managing. Key among them are first, the retiree's spending plan; second, the investment allocation and security selection with the retirement portfolio; and third, making tax-smart withdrawls from the portfolio accounts.
Coming up with a solid financial plan means doing your homework, from examining your current situation to setting goals and deciding how to measure your progress. When working with a financial planning professional you will go through six steps together:

  1. Agreeing on how to work together. Your financial planning professional will define each of your responsibilities and together you will decide how to make decisions.
  2. Gathering information and setting goals. You will define your tolerance for risk and set time frames.
  3. Analyzing and strategizing. You will look at your assets, liabilities, cash flow, current investments, insurances, and tax situation to see how changes to your current patterns will or will not meet your goals.
  4. Reviewing recommendations. You will learn about the rational and techniques used to get you to your financial goals.
  5. Put a plan into motion and keeping you on track. Carrying out recommendations and coordinating these actions with other professions, like attorneys and accountants, is paramount to financial success.
  6. Monitor progress and make sure you stay on track. When a financial planner is charged with the task of keeping you on track, you have a much greater chance of success. Working with a financial planner means you have someone who will "hold your feet to the fire" when you start to get off track.

You are ultimately responsible for your own finances and the results you get. Avoiding mistakes and starting a plan early are just two keys to long-term financial success. If you find the task of financial planning daunting and you don't have time to establish a plan, working with a qualified, experienced financial planner may be the best investment you ever make.

Category: Financial

Julie Cole


CFP®, FLMI, Annuity Product Manager

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