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Financial Planning, or Mere Lip Service? Ask These 5 Questions to Help You Find the Answer

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He or she may look like a financial planner. They may talk like a financial planner. They may even act like a financial planner, and it might say “financial planner” on their business card. But is the person you’re trusting to plan your financial planning really a financial planner? Dig a little deeper and you may find to your surprise that the answer is no.

Buyer Beware

We were intrigued by this article we found just last week on the CNBC website, dealing with this very topic. “Take these 5 steps to ensure you are getting real financial planning — not just lip service,” the article is called, and based on our experience with so-called planners who provide advice that is mediocre at best, we think this article sounds a helpful note of caution to all of us who are consumers of professional financial services. The article was written by Frank Paré, president of the Financial Planning Association, a group with a vested interest in enforcing higher standards for people in the planning profession. He acknowledges the dilemma consumers face. “The spectrum of professionals who claim to offer financial advice is a broad one,” Paré writes – “so broad, in fact, that it can be difficult to define exactly what ‘financial planners’ are and the kinds of skills they should bring to the table in their work with clients.”  In other words, when seeking professionals who can provide solid financial advice, the buyer had better beware.

Here at AgingOptions, we strongly advise our radio listeners and seminar guests of the benefits of consulting a properly trained and certified financial professional. “The benefits of working with a financial planner are well documented,” Paré writes. “But to realize those benefits, you had better be sure the professional in whom you are entrusting your financial well-being – and, likely, your assets – has the right combination of core competencies and expertise.”  Paré minces few words in taking some of his self-promoting colleagues to task. “The problem,” he says, “is that the title ‘financial planner’ and term ‘financial planning’ have been used for marketing purposes by many in the financial services industry to sell their investment or insurance services, when what they are actually providing clients is not really financial planning.”

Comprehensive Knowledge

The bar for a true financial professional, according to Paré, is set quite high. He writes in the CNBC article that qualified financial planners should be competent to advise clients about cash flow, investments, and retirement.  They should have a solid working knowledge of tax law, estate planning, risk management and insurance. In order to help their clients set and achieve their financial goals, planners have to know how to weave all the various elements into a cohesive and individualized financial plan. So with that as a baseline, how do you as a consumer determine whether your prospective financial planner passes muster? Paré gives us five questions you should ask before you hire a financial professional. Let’s review the list.

Five Key Questions

First, ask your planner, What is your information-gathering process?  In order to qualify as a certified financial planner, an adviser will have been trained to gather a wide range of financial data, so you can see the big picture before acting on any recommendations your planner might make. If your planner is only focused on investments and insurance, he or she may not be acting in your best interest.

Second question: What does your financial planning process entail?  “Financial planning is a process, not a product,” Paré writes. Your planner needs to be able to carefully organize and synthesize a large amount of personal financial data in order to put together a comprehensive plan with appropriate recommendations to suit your needs. If he or she seems to be winging it or merely going through the motions, you’re probably not being well-served.

Third, you want to know, How will you work with other professionals in developing and executing my financial plan?  A truly professional planner must be willing to serve his or her clients through collaboration with others – with a CPA, for example, or estate planning attorney or tax planning strategist.  “When the situation calls for it,” says Paré, “they need to collaborate with other specialists in certain areas to augment their own expertise.” Make sure your planner is a team player.

Fourth, find out, What is your area of specialization, and how will you help me in areas where you don’t have a specialty? “It’s rare to find a professional who has expertise in every single area of financial planning outlined earlier,” Paré advises. “Those professionals who do financial planning have access to networks and services that will enable them to address the many specific needs and challenges you face.”

Finally, ask him or her, How will you communicate with me to make the plan crystal-clear? Your planner should ever patronize or confuse you. You should never feel mystified by fees you’re charged or products you’re paying for. When you choose a planner, “ask the right questions,” Paré says, “and ensure what you are receiving is real financial planning — and not just lip service.” Then insist on clear, concise, understandable answers. We think that’s good advice.

The Five Facets of Retirement Planning

The recommendations from the CNBC article not only apply in financial planning, but in retirement planning as well. Good planning is a process, not a product, and the outcome should be a well-rounded, carefully crafted plan that will ensure your peace of mind for the next phase of your life, a period which can easily last twenty-five or thirty years or more. At AgingOptions we tell people all the time that “retirement planning” and “financial planning” are definitely not synonymous. A truly comprehensive retirement plan must include not only your money but also where you’ll live (housing), how you’ll stay healthy (medical), how you’ll relate to your loved ones (family) and how you’ll protect your interests (legal). Blend these all together and you have a LifePlan from AgingOptions, your blueprint to guide you as you create the retirement of your dreams.

There’s a simple and risk-free way to learn more about this revolutionary approach to retirement planning: come and join Rajiv Nagaich at a free LifePlanning Seminar near you. Invest just a few hours and discover a brand-new way of thinking about and preparing for your retirement. For a complete listing of dates, times and locations, visit our Live Events page where you can select and register for the seminar of your choice. We’ll save a seat for you!

(originally reported at

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