Make sure your advisor is planning for the unexpected and is providing you with a unique plan fit just for you that is reevaluated every year to make sure that this plan meets your needs, goals and priorities.
Financial planning encompasses several areas of expertise.
Financial planning is a simple title for a complex field of work. A wide range of professionals can market themselves as financial planners, so it is important to understand the specific focus and expertise of any financial advisor before hiring. Some focus primarily on investment advice, others on insurance products or tax. To give the most effective and comprehensive financial planning advice, however, a professional needs solid grounding in all of these areas.
Financial planning is about more than putting as much money as possible into the highest-yielding investments possible. It is about having the money you need available when you need it, about finding low-cost ways of meeting your goals, and about keeping as much of your income as possible. That is why someone who narrowly specializes in investment advice is not the best choice for handling your broader financial needs.
A sound plan allows for both the expected and the unexpected.
A good financial plan takes into account both anticipated and unanticipated life events. Saving for retirement or college, for example, must be balanced with the need for emergency funds and adequate insurance coverage. Money that is locked away in a retirement or college savings account will be of limited benefit to you if you lose your job or encounter other types of hardships that require immediate access to funds. A professional who can advise you about how to keep enough of your money accessible and how to effectively manage your risk with appropriate insurance coverage is valuable in this respect.
A good plan also takes a long-term view of finances, providing for transfer of assets across generations. It is easy to get caught up in the goals we set for this life – buying a home, retiring at a certain age, sending kids to college, – but it is important to also give thought to what happens to everything when we are gone. No one has the luxury of knowing exactly when that will be, and failing to plan for it occurring earlier than we would like can leave our loved ones in financial chaos and uncertainty. Carefully considered estate planning ensures that the people and things we care about will benefit from what we leave behind and frees our heirs from unnecessary and costly hours spent in courtrooms and attorney’s offices.
An optimal financial plan is individually tailored.
A sound financial plan considers the individual situation of the person for whom it is designed. In order to give appropriate advice, a financial services professional must gain an understanding of your current financial situation, your goals, priorities, resources, and risk tolerance. Any financial advisor that you hire should take the time to discuss these things with you. There is no on-size-fits-all financial plan. The more your advisor knows about your financial life, the better he or she can tailor a plan to fit its unique shape.
Comprehensive financial planning includes tax planning.
Getting the most out of your money requires not only knowledge of market trends and investment opportunities, but also of their tax consequences, which will vary based on a wide range of factors. Virtually every financial move you make will impact your tax picture, so maximizing your return on investment involves intricate knowledge of the increasingly complex tax code.
A good plan will change over time.
There is no “set it and forget it” strategy for financial planning. Your financial advisor should meet with you regularly, at least once per year, to reevaluate your needs, goals, and priorities, as well as how updates to the tax code may alter your return from year to year.
Boelman Shaw specializes in both tax and financial planning, including education, retirement, insurance, and estate planning. We take the time to get to know our clients individually so we can provide the best possible advice. We believe that this approach is essential to enabling our clients to generate more income, to keep more of it after taxes, and to have resources available for the things that matter most to them.
Material discussed herein is meant for general illustration and/or informational purposes only. Because individual situations will vary, the information shared here should be used in conjunction with individual professional advice.