Are Your Investments in Sync With Your Goals?

Since March, many people have been scrutinizing their investments anew. Broad-based stock market indexes like the Dow Jones Industrial Average and the S&P 500 have been volatile due to economic news surrounding the coronavirus pandemic. Investments in the stock market may have seen sharp fluctuations in value.


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Your Goals and Your Financial Plan Should Align

While it’s important to be aware of what’s happening in financial markets and economic news, the more crucial task is making sure that your financial plans are in sync with your goals. Financial planning is not a game in which the goal is to win a certain amount of money or keep an eye on the stock market. Rather it is a plan to help you achieve your goals.

Think about it for a minute. If your life goals are to start a family within five years, your investing strategy may differ profoundly from someone whose life goals involve retiring within two years. People who want to start a business may have very different goals from people who want to spend part of every year traveling extensively. 

As a result, you need to make sure that you work with a financial advisor who knows what your personal life goals are. At Financial Freedom, our team of fee-only fiduciary wealth management professionals helps you achieve your life goals and objectives.

We believe your investments should be part of a comprehensive financial plan. Comprehensive financial plans include strategies and steps for every area of your financial life, including:

  • Your cash flow, including monthly income and expenses
  • Your investments
  • Your retirement portfolio
  • Educational expenses (for children and grandchildren)
  • Risk management (insurance needs)
  • Income tax planning
  • Your estate plan (including wills and powers of attorney for finances and health should you become incapacitated)

A financial advisor should review your financial information and give you an actionable plan for each of these categories. The advisors at Financial Freedom go a step further by providing continuous personalized support to keep you on track.

A good financial advisor will prompt you to rethink your goals periodically. As life changes, your goals might well change. Suppose you marry or divorce within a given year, for example. These changes could trigger changes in all your goals, including where you live, when you plan to retire, plans for children’s educational expenses, risk management coverage and your estate plan. 

Then, as time goes on, other goals could come into play or existing goals could change further. If marriage leads to children in a few years, for instance, your estate plan should be revised to include more beneficiaries and your educational savings could swing into play from being dormant. You might want a larger house or start planning for a second home. If you own your own business you might want a succession plan.


Looking for an Advisor

What kind of advisor should you look for? The many titles financial advisors use, such as wealth management advisors, financial advisors, investment managers and so on, often aren’t helpful in letting you know what they do, and how they might be differentiated from other types of financial advisors.

The smartest step is to look for a CERTIFIED FINANCIAL PLANNER™professional. Why? CFP®s must meet certain requirements. They must undertake comprehensive educational courses, pass a comprehensive examination, and demonstrate several years of experience in the financial planning field. They must also abide by a code of ethics. Finally, all CFP®s must actively engage in continuing education and updates to ethics and practice standards in the profession.

The education, exam and experience requirements mean that CFP®s are knowledgeable in investments, portfolio strategy, risk management, cash flow strategies and related areas, such as tax planning. 

All CFP®s are held to a fiduciary standard. As a result, they must place your financial interests above their own. 

When you’re looking for CFP®s, you may want to interview several. The most prudent move is to focus on those that are in your area, as they will have the best grasp of salient local facts affecting your financial life, such as state and municipal taxes and real estate prices. It’s also wise to focus on CFP®s whose clients are similar to yours in net worth and life circumstances. A CFP® who primarily handles single people with middle-range incomes, for instance, will be expert in that area, but perhaps not in the issues facing high net worth families. 

Is Financial Freedom Fee-Only Wealth Management right for you?  At Financial Freedom, we work with individuals and families looking for a better solution to achieve their financial goals. We assist our clients will all aspects of their financial life, not just investments. Our goal is to not just preserve your wealth, but help it grow. 


What to Ask a CFP®

You may want to make appointments with several CFP®s who meet these parameters. During each appointment, see if you feel comfortable with the person. Can you imagine discussing goals and financial matters with them? When they explain financial concepts or strategies, do you find what they say clear and easy to understand?

Then, ask questions. Here are some standard questions to ask of a CFP®:

  • What services do you offer?
  • Do you have any specialties (such as retirement or estate planning)?
  • What type of clients do you usually work with?
  • What’s your philosophy on financial planning and investing?
  • What’s the best way to achieve Goal X? Goal Y? (Pick specific goals important to you)
  • How can I maximize my retirement nest egg?
  • How many years have you been practicing as a financial planner?
  • Do you have a minimum investable asset requirement?
  • How do you charge (by the hour, as a percentage of assets under management or other model)?
  • Are you paid commissions? If so, on which products?
  • Will we be working directly with you or handed off to someone else once we sign up?

At Financial Freedom, we strive to create wealth management strategies that aim to help our clients maximize their estate, tax and retirement goals...without increasing risk.

For more information, we are here to answer any questions you might have. Contact Financial Freedom Fee-Only Wealth Management today!

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Filed Under: Comprehensive Financial Planning, retirement planning