What is a financial planner? And why would you want to meet one? Too often the answer is focused solely on investment advice. And while understanding what a sensible investment strategy looks like is certainly part of the mix there is a lot more on offer.
The first and most important benefit is simply in having a plan. Achievement is much more likely when the destination is known as well as the steps needed to get there. And that both can be reviewed and adjusted as needed.
And what will the destination be? A plan will be based on life goals. What do you want to achieve over the next 1 to 30 years? What financial steps can or need to be taken to achieve those goals. Even knowing how much is needed at retirement and the focus that provides can be a significant forward step.
Secondly the financial planner provides education and support. No one can control what investment markets will do in coming years but focusing on what we can control means we are more likely to get to a better place than if we don’t plan at all. How much we invest, having the right mix of investments, being disciplined and consistent over time.
Financial planning also considers broader issues. Are you spending within your means? It's easy for money to come in and quickly go out without a plan. By focusing on your financial goals, planning can help you manage your spending better.
What about insurance? Are your assets appropriately insured? Life events like death or disability can significantly impact your financial situation. Without proper risk management, achieving your goals becomes challenging. Financial planning also addresses taxation issues. Do you have a family trust? Are your wills and powers of attorney in order?
Investment considerations are also part of financial planning. What kind of investments will you need? How much return do you require? It's essential to understand and feel comfortable with your investment choices.
Once your plan is implemented it’s important to monitor it. Life changes, and so do our goals. Regular review ensures that your financial plan stays aligned with your evolving needs.
Financial planning may sound overwhelming, but it shouldn't be. At its core, it's about helping you think about your future and providing the information, tools, and support to create it. It's a valuable process that can empower you to achieve your financial goals.
