When should you hire a financial planner and for what purpose? Should it just be for an hour or two every couple of years when a specific question or need arises? Or should you develop a long-term relationship with a planner that entails regular consultation and planning across the spectrum of your financial life?
To answer that question one first needs to understand that financial planning is intended to provide a comprehensive, integrated approach to one’s finances. It should address the big financial picture by identifying short-term and long-term goals, nonfinancial as well as financial, analyzing current financial resources, to help create and implement strategies for achieving those goals through the effective use and integration of your assets.
This is often followed by regular monitoring and adjusting of one’s financial plan and resources in response to changing personal circumstances and needs. Smart financial planning is not a one-time or occasional endeavor.
Here are a few things that a long-term relationship should be able to help you with:
1 – Helping to plan with context. Piecemeal planning often means making decisions without taking into account the scope of one’s overall financial picture. For example, how can an advisor recommend which investments to buy inside your 401(k) if they don’t know the rest of your investment picture or retirement assets?
2 – Potentially avoiding a crisis before it happens. Financial planners often see people for panic planning. Something’s gone wrong and they need it fixed. Perhaps they’re five years from retirement and they realize they don’t have enough in their nest egg.
3 – Helping to identify and avoid costly mistakes. Piecemeal planning may save money up front, but could prove far more costly than comprehensive planning if key issues are overlooked. A stay in a nursing home or assisted living facility could drain a lifetime of investing.
4 – Getting things done. It’s easy in our busy lives to let important financial matters slide by like drafting a will, creating a spending plan, saving for retirement or purchasing insurance.
For more information, please contact Rebecca Robins, CFP™, CPA at 661-222-2331. CA Ins. # 0D75745. Securities offered through Associated Securities Corp., Member: NASD/SIPC. Advisory services offered through Associated Planners Investment Advisory, Inc., a Registered Investment Advisor.