For anyone who has children, or the blessing of time with grandchildren, I’m sure you can relate to the recent experiences I’ve had with my son. The mind of a child is an amazing thing! Like many other five year-olds, he’s curious. He is asking a lot of questions, very few of which are presented as open prose. He asks questions looking for just a “Yes” or a “No” answer when a simple “Yes” or “No” may not do. Lucky for me, I’m used to handling these types of questions.
In my eight years of financial planning, it’s been rare that I could answer my client’s common questions with just a word or two. Perhaps you ask similar questions: Can I retire at 62? Can we afford a bigger home? Should we use a 529 plan to save for college? Is investment ‘X’ better than investment ‘Y’?
The answer given to my son, and likewise to these questions posed by my clients is simple: “It depends…” Life and personal finances can be complex. There is cause, and then there is effect. More often than not, the correct answer or explanation is only found after digging through more information. For my son, this leads to more curiosity and learning. For my clients, it leads to depth of relationship, and more confidence in the big decisions they have to make in their financial lives.
There aren’t universal answers in my business. There aren’t cookie cutter solutions. Sound financial advice is not like the Ten Commandments or traffic laws. It does not exist independently of the people to whom it applies. As rationale people, we universally understand not to commit murder or that we shouldn’t run traffic lights. But this isn’t the case with financial counsel. What’s financially right for one person may be entirely wrong for another. It’s my job, as a CFP® professional, to thoroughly explore a person’s goals, attitudes, behaviors, and financial situation in order for the best advice to be given.
Consider this example: I often hear, “everyone should contribute to their employer’s 401(k) or 403(b) program.” Well, a good CFP® professional might make a different suggestion based on income tax brackets, intermediate savings goals, and liquidity needs. Perhaps insurance and a cash reserve have not yet been covered either. There are no universal answers.
The correct answers for you? “It depends…” But rest assured the answers can be provided by professionals trained in multiple areas of expertise. As a CFP® professional, I can advise individuals on a number of financial issues, such as: cash flow, investments, risk management, tax, retirement, and estate planning. I often describe my services as “comprehensive” based on the broad scope of the information considered. It’s also why my value promise for my clients reads: “Tailoring Strategies to Manage Your Financial Future.”
Like my five year old, it’s good to be curious. It’s also good to ask lots of questions, even if there aren’t short, one word answers. When it comes to your finances, be sure to always ask the question, “Do you practice as a fiduciary?” Put another way, “Do you put the interests of your client ahead of your own?” Whomever you work with, be sure they have the credentials to answer, “Yes.” In this case, a single word can tell you exactly what you need to know.
From Us Wealth Management