There is a popular belief today that all financial advisors do is focus on investing people’s money. This is understandable given that for many decades, that was the main (or sole) focus of many Financial Advisors.
But thankfully, that has been changing in recent years.
Instead of just focusing on the stocks and bonds a client has, a Financial Advisor today is able to create, along with their clients, a financial plan on issues ranging from retirement, education, taxes, estate, insurance, and investing.
Notice that investing is just one of 6 topics that a financial plan covers.
In other words, there has been a massive shift of focusing on investments, to focusing on the entirety of someone’s financial life. Yet we still need to ask the question:
Why Do You Need A Financial Plan?
To answer this question, it would be useful in understanding what goes into developing a plan in the first place. To do that, let me explain how my process works:
First, I meet with my clients and we figure out all the goals they have in life. We discuss issues like their retirement, starting a business, buying a home, and any other goal they have.
Next, we determine where they currently are financially. We analyze our client’s investments, the amount they have saved, the liabilities they have, and many other items. In this step, we are trying to make sure that we fully understand where they stand financially.
Lastly, once we know where our clients stand currently, and where they want to go in the future, we are then able to determine what they need to do to get there. What do they need to do to bridge the gap between where they are today and where they want to be in the future? How much more do they need to save? What returns do they need to hit their mark? What risks might they face in trying to get there?
This process that I use with my clients is in stark contrast to how most Financial Advisors operated in the past.
In the past, a Financial Advisor only working on your investments might gauge your risk and then invest appropriately. But that misses the mark of what’s truly important. Because in the end, most people don’t really care about what investments they own. But rather, what their investments can do for them.
And that is where the power of comprehensive financial planning comes into place. By engaging in a conversation about the hopes and dreams and goals you have for your life, we are able to determine the best course of action to get you to where you want to go. And the specific investments you own, frankly, become secondary to the conversation.
The effect of having a clear, concise, and actionable financial plan cannot be overstated. For most people, it’s the first time in their life that they have financial clarity.
They know where they want to go and they know what needs to be done to get there. Which allows them to stop worrying themselves over things they can’t control and instead focus on the parts of life that bring them the greatest pleasure and reward.
If you’d like to learn more about how financial planning can help you achieve your goals, I’d be happy to talk to you. You can email me at scott@dev-forthrightfinances.pantheonsite.io, call me at 424-258-4460, or contact me here.