Tuesday, January 22, 2013

'The Trusted Family Advisor’

55) The Trusted Family Advisor

ow does one, especially a woman, choose the right Financial Planner?

            Firstly, what is financial planning?

            Financial Planning is the effective management of financial resources to achieve life goals.

            What is a Financial Planner?

            A professional in a vocation involving specialized knowledge & skills used to provide disinterested counsel and service for compensation without expectation of other business gain.

            A Financial Planner may be trained in a variety of personal finance topics ranging from daily financial management to long-term financial planning.  These topics can include goal-setting & prioritizing, values assessments, budgeting (what you spend on), cash flow management (when you spend), banking & bill-paying, credit management, and tax management, to insurance management, home purchasing, education planning, retirement planning, investing, estate planning, and specialty areas, such as planning for same-sex couples or divorce.

            The CFP (Certified Financial Planner) is often the professional designation of choice.  It covers a wider range of topics than any other financial professional, with the possible exceptions of the Chartered Financial Consultant (ChFC) or a CPA who holds the AICPA's Personal Financial Specialist (PFS) designation.  There are other designations out there, but they are usually related to a single specialized area.

            A Certified Financial Planner holds a certificate from the Certified Financial Planner Board of Standards.  To attain this designation, the professional must satisfy education & ethics requirements, have passed a long, comprehensive competency exam in a variety of topics and have had three years of experience.  They are then governed by a Code of Ethics, a Code of Practice Standards, and a Code of Professional Conduct.

            A disclosed CFP Practitioner practices the 6-Step Financial Planning Process:

            1. Establishing and defining the client-planner relationship.

            2. Gathering client data, including goals.

            3. Analyzing and evaluating your financial status.

            4. Developing and presenting financial planning recommendations and/or alternatives.

            5. Implementing the financial planning recommendations.

            6. Monitoring the financial planning recommendations.

            All of this is separate and above from licenses and registrations for managing/brokering investments and/or insurance, preparing taxes, practicing law, etc. and other specialized designations such as for divorce financial planning.

            A CFP Practitioner (vs. a CFP) will be one of the best persons you will ever know since they are usually intelligent, articulate, educated, practiced at teaching, and they like to help people, and adhere to high personal moral integrity.  They are not all about making money for themselves, although they like to earn a decent living and be in control of their own lives.

            The biggest issues that women face relate to their historic non-involvement with money.

            If you think about this, it’s ludicrous.

            Women live longer than men, often marry someone older, and already control more than have of the money in the US.

            They have always had to provide for children (and now, parents), and have always managed the household, making them excellent multitaskers, budgeters, and savers.

            But it's been the man's purview to have a team of financial professionals, including accountants, attorneys, bankers, insurance agents, and investment brokers.

            Men like to confidently take action, often ignorantly and without advice, and they often practice, 'Ready FIRE, Aim'.

            Most financial professionals are men and most financial decision-makers have been men.  If a man and a woman visit their advisor together, studies show that the professional spends the majority of the time speaking to the man.  The man will 'take care of the little lady who should concern herself with such things’.  This just pisses women off and they usually find a new advisor when their man is no longer in the picture.

            Therefore, a woman will want to choose a planner who is referred and/or whom she has checked out by hearing them speak (e.g. live, TV, radio, writing).  She will check their credentials.  She will meet with him/her to feel comfortable and heard.  The planner should be professional, willing to explain things again, and again, until she feels comfortable with the answers to her questions and the advice.  The planner needs to be patient, understanding and have a good bedside manner.  A woman will develop trust for the planner and be involved.  And the planner will be responsive.

            In my office, we appreciate delegation, not abdication; we fire clients who abdicate responsibility and involvement.  And we place particular emphasis on education and security.

            We like to teach, women like to learn.  Women have different goals and values than men.  Women like to make a plan, and patiently stick to it.  Women integrate, men categorize; women ask for help.  Women are loyal and send referrals.

            In her book 'Next: Trends for the Near Future', Marion Salzman, a Young & Rubicam Global Brands Manager observed that people are spending more and more time with like-minded individuals.  This ranged from who their friends were, the activities in which they participated, with whom they do business, and even where they live, moving to be closer to those who share their values and interests.

            The right planner may be more loyal, communicative, respectful, and true, than a husband.

            Who's your Trusted Family Advisor?


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  2. Thank you for sharing. Family business advisors work with enterprising families to develop comprehensive strategies enabling families to thrive together as owners, managers and family members through succeeding generations.