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Financial Planning FAQs

Commonly asked questions from our customers about financial planning and the benefits of working with a Financial Planner.

Q: What is financial planning? 

A. Financial planning is a process of five distinct steps that clients and their advisors utilize to set achievable goals and document the path to those goals. From budgeting, to planning for retirement, to saving for education, to managing your taxes and your insurance coverage, “finances” doesn’t mean just one thing for most Americans—and “financial planning” means much more than just investing. Bringing all the pieces of your financial life together is a challenging task.

Q:   Why should I make a financial plan? 

A. The adage goes "If you don't know where you’re going, how will you know when you get there?" The planning process helps identify not only what is achievable given your resources, but sometimes what is being overlooked. Ideally, it solidifies that your goals are really your goals and helps balance the pull and push of today’s wants and needs versus those of the future.

Q:   Who is a financial planner?

A. Although many professionals may call themselves “financial planners,” CFP® professionals have completed extensive training and experience requirements and are held to rigorous ethical standards.

Q:   Can I make a plan on my own? 

A. The short answer, yes. However, there is a lot to account for and understand. Financial planners have expertise and insight that basic or 'free' financial calculators and magazines may not help you with. Personalized assistance can be extremely valuable. How much advice you receive from a planner is up to you, meaning you can handle your finances a little or a lot.

Q:   What should I look for in a financial planner? 

A. Your financial planner should provide unbiased advice and tailor recommendations to you. Not all CFP® Certificants are actively providing financial plans for their clients. Many specialize in specific areas like investments or insurance or business development. There is nothing inherently wrong with that; simply ask the person you are considering what percentage of their time they spend on planning and how much on other or specialized activities.

Q:   How can I plan for tomorrow when I can hardly pay for today? 

A. Like exercise, getting started is often the hardest part but the payoff can be tremendous. If you are having trouble making ends meet today and you don't take some action for the future, you will likely continue in the same predicament. Financial planning isn't just for the wealthy and often isn't more expensive than many of the frivolous things that creep into our daily spending habits.

Q:   How much should I be saving?

A. The answer is it depends on your age, circumstances, goals and values. If saving isn't already a habit, the important thing is to get started at a manageable level and then strive to increase that level whenever possible. Always make sure you are contributing enough to receive any company matching contributions to retirement plans. Don't leave that compensation on the table.

Q:   What type of information do I have to provide? 

A. The quantifiable stuff is what you own, what you owe and what you earn. In conversations with your financial planner, he or she will help you uncover some more of the qualitative factors like your history with money and values as they help you set achievable goals to work toward.

Q:   What should a financial plan include? 

A. A financial plan should include a review of your net worth, cash flow, goals and objectives, investment portfolio, insurance, and taxes. These are the building blocks used to create projections and to design a plan for implementing strategies to achieve your goals.

Q:   Why do I need to consider insurance with my financial plan? 

A. A big part of an effective plan is becoming aware of and addressing the risks that may lie ahead. Insurance helps protect you and your loved ones against catastrophic events. Health insurance, life insurance, disability insurance, auto and home insurance are all things to consider in a financial plan.

Q:   What should I do once I have a plan? 

A. Stay actively involved. Executing on your financial plan is a team approach. If you have someone managing your investments, they should execute on your investment strategy. There will be other things like managing cash flow, opening accounts and saving or spending at the 'planned' levels that will require your active involvement. Communication with your planner is also a crucial component.


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