Of all the millionaires in the baby boomer generation, roughly 75% of them use a financial planner or advisor. So, it begs the question, do you need one? Let me start by saying when I use the term “financial planner” I mean someone who is doing holistic financial planning – not simply managing money. Investment management should be a core component of what a financial planner does but it certainly shouldn’t be their sole job – that would mean you’re working with a transactional broker. A transactional broker is simply a product salesman. Their sole form of income relies on them selling you a new product or fund. I’m not sure about you, but to me this does not sound like someone with your best interests in mind.
So, should everyone have a financial planner? Well, let me clarify before we go further. Do I think that everyone needs a full-time planner on call to put all their financial house in order at all times? No, not necessarily. Do I believe that everyone should at least have someone they trust who can take the occasional look over their shoulder and give them a greenlight on their DIY financial plan? Absolutely!
Here’s the thing, the old way of working with a financial planner/advisor required that you, the client, have assets or money to bring over and invest. That’s archaic and not the way the business works anymore – or at least not my business. In my model, regardless of assets, anyone can receive financial advice on a wide array of topics. Perhaps you have questions regarding student loan or credit card debt, or you want someone to take a second look at your 401k allocations. You may want a second opinion on job offers and someone who can compare the benefits from each company and determine if it makes financial sense. Or maybe you simply want someone to sit down with you and put together a detailed budget so that you always know where your money is going, putting you in more control.
These are all issues that financial planners assist their clients with and if yours doesn’t then you need a new one! The days of bringing your money to someone and then hearing from them once a year are over. Financial planning has grown so robustly and it’s given consumers more options in the process. For example, now the client has the option of deciding how their financial planner is paid. You can hire one hourly, you can hire them annually and pay a monthly or quarterly fee, or if you prefer, they can charge you based on the amount of assets you invest with them. Unfortunately, not all planners will offer this robust menu so you need to be sure you’re working with someone who provides you all these options.
When it comes to your financial health you should treat it much like you would your physical or mental health. “Take care of your wealth like you take care of your health” is a phrase that resonates so deep with me. Everyone needs some coaching from time-to-time and it never hurts to have someone to give you a second opinion or to bounce new ideas off. Therefore, one of the most important things you can look for in a financial planner is that they have the desire to teach and educate you. One thing I always tell my clients is that I don’t simply want them to take my recommendations and leave. I want to explain the logic so that they understand why this is the best strategy for their unique situation.
To bring things full circle, financial planning may be the one area in life where the absence of a second opinion could cost you tens or even hundreds of thousands of dollars. Now, in the new age of financial planning, you the client, have control over how you want to pay for such services. Some people require a more hands on approach and want someone that they can meet with on a regular basis. Others may simply want someone to provide a second opinion or make sure that their financial plan is efficient and doesn’t contain any vulnerabilities. No one should be afraid to pay a little if it could result in them saving or making a lot. So, don’t settle for average, you deserve to work with someone who will teach you, grow with you and ensure that your financial health is always taken care of with utmost attention to detail.
Securities and investment advisory services offered through Woodbury Financial Services, Inc. (WFS), member FINRA/SIPC. WFS is separately owned and other entities and/or marketing names, products or services referenced here are independent of WFS. 27575 Ferry Rd., Warrenville, IL, 60555. 630-221-1112