Common Questions About Financial Planning
By: Stephen C. Schulmerich, CFP, AIF®


Life is full of questions — Will I have enough money for retirement? Do I have enough saved for my child’s education? How can I buy a home when I’m saving for all of these other things? These examples and many more might have you asking yourself if you should seek the advice of a financial professional. But maybe you are not quite sure where to start. Here are some commonly asked questions about financial planning that may get you on your way.


Why should I choose a financial planner over another type of financial adviser?
In general, if you’re not sure what advice you need, start with a financial planner. A financial planner will focus on your needs first before recommending a course of action. Most planners have been trained to take a broad look at your financial situation, while accountants, investment advisers, stockbrokers or insurance agents may focus on a particular area of your financial life. Always ask a financial adviser what qualifies him or her to offer financial planning services.

What is the best age to start financial planning? 
While it is true that the younger you start the more beneficial the process will be, financial planning is worthwhile at any age. Although younger people may have more decisions to make regarding their financial lives, changing laws and circumstances can lead middle-aged people and seniors to have to adjust their financial plans as well. Changes in tax law, for example, may require many people to rethink certain investments or estate plans, and adequate disability planning becomes more important as people age.

How are financial planners paid?
There is no uniform method by which financial planners are paid. A planner can be paid a salary by the company for which the planner works; by fees based on an hourly rate, a flat rate, or on a percentage of your assets and/or income; by commissions paid by a third party from the products sold to you to implement the financial planning recommendations; or by a combination of these methods.

Do I have to pay a financial planner for the first interview? How much does a planner typically charge?
Most financial planners will meet with you at no charge, to talk about your reasons for wanting to work with them. During this initial session, planners will also decide if they can help you and explain how they would work with you. Like other professionals, the rates financial planners charge depend on their experience, geographic location, level of services and your needs. Interview more than one planner to get an idea of typical fees for financial planning services.


What You Should Know About Financial Planning


By: Stephen C. Schulmerich, CFP, AIF®

Do your life goals include buying a home, saving for your child’s education or planning for retirement? Maybe you have come across the term “financial planning” recently and wondered what it means. You may have decided to get your finances together but you’re not sure how. Or you may feel it’s time you went to a financial planner for some professional advice. Whatever your situation, the following information can help you become more familiar with financial planning and decide what’s right for you.

What Is Financial Planning?
Financial planning is the process of meeting your life goals through the proper management of your finances.

The financial planning process consists of six steps that help you take a “big picture” look at where you are financially. Using these six steps, you can decide where you are now, what you may need in the future and what you must do to reach your goals.

The process involves establishing the client-planner relationship, gathering relevant financial information, analyzing your financial status, developing financial planning recommendations and coming up with a strategy or plan to follow so you can meet your goals given your current situation and future plans.

The Benefits of Financial Planning
Financial planning provides direction and meaning to your financial decisions. It allows you to understand how each financial decision you make affects other areas of your finances. For example, buying a particular investment product might help you pay off your mortgage faster or it might delay your retirement significantly. By viewing each financial decision as part of a whole, you can consider its short- and long-term effects on your life goals. You can also adapt more easily to life changes and feel more secure that your goals are on track. 

Can You Do Your Own Financial Planning?
Some personal finance software packages, magazines or self-help books can help you do your own financial planning. However, you may decide to seek help from a professional financial planner if:
• you need expertise you don’t possess in certain areas of your finances. For example, a planner can help you evaluate the level of risk in your investment portfolio or adjust your retirement plan due to changing family circumstances. 
• you want to get a professional opinion about the financial plan you developed for yourself. 
• you don’t feel you have the time to spare to do your own financial planning. 
• you have an immediate need or unexpected life event such as a birth, inheritance or major illness. 
• you feel that a professional adviser could help you improve on how you are currently managing your finances. 
• you know that you need to improve your current financial situation but don’t know where to start. 

What Is a Financial Planner?
A financial planner is someone who uses the financial planning process to help you figure out how to meet your life goals. The planner can take a “big picture” view of your financial situation and make financial planning recommendations that are right for you. The planner can look at all of your needs including budgeting and saving, taxes, investments, insurance and retirement planning. Or the planner may work with you on a single financial issue but within the context of your overall situation. This big picture approach to your financial goals sets the planner apart from other financial advisers, who may have been trained to focus on a particular area of your financial life.

Financial Planning Process Can Help Baby Boomers Realize Retirement Goals 

By: Stephen C. Schulmerich, CFP, AIF®

Much attention has been paid in recent months to the mounting concerns over the saving and spending habits of Americans. Not long ago, the Department of Commerce reported a negative savings rate for American consumers. Studies show that even as more workers contribute significant pre-tax dollars to their 401(k) plans, consumer debt is nearing an all-time high.

It’s evident that too many Americans are neglecting long term financial planning. Like closing the door of a closet that badly needs organizing, the attitude seems to be out of sight, out of mind. Concern is particularly real for members of the baby boom generation.

Already in their mid-50s and just 10 to12 years away from traditional retirement age, many baby boomers are facing the undeniable need to re-evaluate their financial preparedness.  Financial planning can help these individuals meet financial goals and get serious about retirement planning through the proper management of their assets.

However, not all financial advisors are created equal. A financial planner who develops a comprehensive and personalized financial plan will take a holistic view of an individual’s financial resources, obligations and goals. The CFP™ certification, from the Certified Financial Planner Board of Standards, is a good sign a financial advisor can meet your needs. This certification is awarded to individuals who meet strict ethical requirements, successfully complete rigorous education coursework, pass a comprehensive examination and demonstrate their dedication to providing sound financial advice through experience.

To be confident that you are receiving financial planning advice, look for your advisor to follow some or all of the following steps in creating a plan that’s right for you:

Establishing and defining the client-planner relationship. A financial planner should clearly explain or document the services to be provided to you and define both his or her responsibilities and yours. The planner should explain compensation fully — how he or she is paid, by whom, how frequently, etc. You and the planner should agree on how long the professional relationship should last and how decisions will be made. 

Gathering client data, including goals. A financial planner should ask for information about your financial situation and retirement interests. When working with the planner, you’ll want to work together to define your personal and financial goals, understand your time frame for results and determine your risk tolerance. Your financial planner should gather all necessary documents before developing a plan.

Analyzing and evaluating your financial status. A financial planner should analyze your information to determine what you must do to meet your retirement goals. Depending on what services you need, this could include analyzing your assets, liabilities and cash flow, current insurance coverage, investments or tax strategies.

Developing financial planning recommendations. Your financial planner should offer recommendations that address your goals — whether retirement-focused or all-encompassing — based on the information you provide. The key at this step is helping you understand all the options available, so you’re able to make informed and sound decisions. The planner should also listen to your concerns and revise recommendations as appropriate.

Implementing the financial planning recommendations. You and the planner should agree on how the recommendations will be carried out. Your planner might carry out the recommendations, serve as your “coach,” or coordinate the whole process with you and other professionals such as attorneys or stockbrokers.


Monitoring the financial planning recommendations. You and the planner should agree on who will monitor your progress toward your goals. If it is the planner who is in charge of the process, expect that your planner will periodically review your strategy, report to you, and adjust the recommendations as needed.

For America’s baby boomers, it’s time to balance retirement hopes with the reality of saving. With expert financial planning help, members of this generation can immediately maximize the income of their most profitable years and create a productive financial structure that will successfully support their retirement goals. 


Knowing Your Rights as a Financial Planning Client


By: Stephen C. Schulmerich, CFP, AIF®

According to Certified Financial Planner Board of Standards (CFP Board) research, more than 40 percent of Americans do not feel in control of their finances. If this sounds familiar, a professional financial planner might be able to help. Knowing what to expect as a client and what constitutes a healthy and productive financial planning relationship will put you in the driver’s seat when it comes to taking control of your financial future.

Working with a qualified advisor can be a financially valuable and emotionally rewarding experience. Trust between you and your financial planner is one of the key ingredients in a successful financial planning relationship. Here are some basic rights that you should expect as a financial planning client:  

Before engaging you as a client, your financial planner should discuss your goals and objectives with you and explain what you can expect from the relationship.  
Your planner should explain all risks associated with his or her financial recommendations and identify any potential conflicts of interest.
Your needs should be the focal point of all recommendations made by your financial planner.
Your planner should demonstrate the knowledge required to offer financial planning advice, such as attainment of the Certified Financial Planner™ certification.
A planner should never divulge your personal and financial information to anyone. Some acceptable exceptions are: sharing it with other professionals to conduct business on your behalf, at your consent, or when mandated by court opinion or law.
Your planner should not provide investment advice or stock brokerage services without the proper license to do so as required by state and federal law.

Use the following checklist to evaluate your existing financial planning relationship. If you are not satisfied with the services you are receiving, assert your rights by discussing your concerns with your planner. A competent, ethical planner will seek to understand and meet your needs and will explain the reasons behind his or her decisions and actions.

Items to look for:

My planner is diligent in carrying out his or her activities.
My planner responds to my phone calls and requests promptly.
Recommendations are appropriate for my situation.
I understand what I'm being charged and why.
I understand and accept my planner’s conflicts of interest.
My interests drive the decisions being made.
I'm involved in decisions at the appropriate time.
I do not feel pressured to make certain decisions.
I receive adequate information to make good decisions.
My planner investigates the products he or she recommends.
I get the service or products I paid for.
My planner presents his or her qualifications or abilities honestly.
My financial planner’s staff is properly supervised.
My information is kept confidential.


10 Questions To Ask When Choosing A Financial Planner

By: Stephen C. Schulmerich, CFP, AIF®

You may be considering seeking help from a financial planner for a number of reasons, whether it’s deciding to buy a new home, planning for retirement or your children’s education, or simply not having the time or expertise to organize your finances. Whatever your need, working with a financial planner can be a helpful step in securing your financial future. The questions below have been prepared to help you choose the financial planner who’s right for you. 

1. What experience do you have?
Find out how long the planner has been in practice and the number and types of companies with which he or she has been associated. Ask the planner to describe his work experience and how it relates to his current financial planning practice. Choose a planner who has a minimum of three years’ experience counseling individuals on their financial needs.

2. What are your qualifications?
The term “financial planner” is used by many financial professionals. Ask the planner what qualifies her to offer financial planning advice and whether she holds a financial planning certification such as the CERTIFIED FINANCIAL PLANNER™ or CFP™ marks. 

3. What services do you offer?
The services financial planners offer depend on a number of factors including their credentials, licenses and areas of expertise. Financial planners cannot sell insurance or securities products such as mutual funds or stocks without the proper licenses, or give investment advice in most states unless registered with state or federal authorities. 

4. What is your approach to financial planning?
Ask about the type of clients and financial situations the planner typically works with. Some planners prefer to develop one plan by bringing together all of your financial goals. Others provide advice on specific areas, as you may need it. Ask the planner if he requires you to have a certain net worth before working with you and if he will implement financial recommendations or refer you to others. 

5. Will you be the only person working with me?
The financial planner may work with you alone or be assisted by others. You may want to meet everyone who will be working with you. If the planner works with professionals outside her own practice, get a list of their names to check backgrounds. 

6. How will I pay for your services?
As part of your financial planning agreement, the financial planner should clearly tell you in writing how he will be paid for the services to be provided. Planners can be paid in several ways including salary, fees, commissions or a combination of these methods.

7. How much do you typically charge?
While the amount you pay the planner will depend on your particular needs, the planner should be able to provide you with an estimate of possible costs based on the work to be performed. 

8. Could anyone besides me benefit from your recommendations?
Ask the planner if she has business relationships or partnerships that could affect her professional judgment while working with you. For example, financial planners who sell insurance policies, securities or mutual funds, have a business relationship with the companies that provide these financial products. The planner may also have other business relationships or partnerships that should be disclosed to you.

9. Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career?
Several government and professional regulatory organizations, such as the National Association of Securities Dealers (NASD), the Securities and Exchange Commission (SEC), your state insurance and securities departments, and the CFP Board keep records on the disciplinary history of financial planners and advisers. Ask which organizations the planner is regulated by and contact those groups for disciplinary information.

10. Can I have it in writing?
Ask the planner for a written agreement detailing the services that will be provided. Keep this document in your files for future reference. 

Make Financial Planning Work for You


By: Stephen C. Schulmerich, CFP, AIF®

Probably the greatest mistake you can make with regard to financial planning is to ignore it completely or procrastinate for so long that you think that the opportunity to do some financial planning has passed you by. While it is true that the younger you start planning the more beneficial the process will be, financial planning is worthwhile at any age. 

Most people put off thinking about financial planning because of misperceptions about what the process involves or whom it can benefit. As part of its public education efforts, the Certified Financial Planner Board of Standards (CFP Board) surveyed CFP™ professionals about mistakes people make when approaching financial planning. The survey showed the public’s most frequent mistakes included:

Failing to set measurable financial goals.
Making a financial decision without understanding its effect on other financial issues.
Confusing financial planning with investing.
Neglecting to re-evaluate a financial plan periodically.
Thinking that financial planning is only for the wealthy.
Thinking that financial planning is only beneficial as you get older.
Thinking that financial planning is the same as retirement planning.
Waiting until a money crisis occurs to begin financial planning.
Expecting unrealistic returns on investments.
Thinking that using a financial planner means losing control.
Believing that financial planning is primarily tax planning. 

How to Make Financial Planning Work For You

To avoid making the mistakes listed above, realize that you are the focus of financial planning. The results you get from working with a financial planner are as much your responsibility as they are those of the planner. To achieve the best results from your financial planning engagement, consider the following advice:

Set measurable financial goals: Set specific targets for the results you want to achieve and when you want to achieve them. For example, instead of saying you want to be “comfortable” when you retire or that you want your children or grandchildren to attend “good” schools, quantify what “comfortable” and “good” mean so that you’ll know when you’ve reached your goals.

Understand the effect of each financial decision: Each financial decision you make can affect several other areas of your life. For example, an investment decision may have tax consequences that are harmful to your estate plans. Or a decision about your child’s education may affect when and how you meet your retirement goals. Remember that all of your financial decisions are interrelated.

Re-evaluate your financial situation periodically: Financial planning is a dynamic process. Your financial goals may change over the years due to changes in your lifestyle or circumstances, such as receiving an inheritance, marriage, birth, house purchase or change of job status. Revisit and revise your financial plan as time goes by to reflect these changes so that you can stay on track with your long-term goals.

Start planning as soon as you can: Don’t delay your financial planning. People who save or invest small amounts of money early and often tend to do better than those who wait until later in life. Similarly, by developing good financial planning habits, such as saving, budgeting, investing and regularly reviewing your finances early in life, you will be better prepared to meet life changes and handle emergencies. 

Be realistic in your expectations: Financial planning is a common-sense approach to managing your finances so that you can reach your life goals. It cannot change your situation overnight; it is a lifelong process. Remember that events beyond your control, such as inflation or changes in the stock market or interest rates, will affect your financial planning results.

Realize that you are in charge: When working with a financial planner, be sure you understand the financial planning process and what the planner should be doing. Provide the planner with all relevant information on your financial situation. Ask questions about the recommendations offered to you, and play an active role in decision-making.

Successful financial planning offers many rewards in addition to the obvious ability to meet your life goals. When CFP professionals were surveyed about the most significant benefit of financial planning in their own lives, the top answer was “peace of mind.” There are few benefits in life greater than this. 

Stephen C. Schulmerich, CFP™, AIF® is a financial planner with Schulmerich & Associates and specializes in Retirement Planning. The information in this article is based on a CFP Board brochure, “What You Should Know About Financial Planning.” It is available free at 1-888-CFP-MARK or www.CFP.net. Founded in 1985, the CFP Board is a nonprofit certifying organization that owns the CFP certification marks and benefits the public by fostering professional standards in personal financial planning. 

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