By Ryan Ovenden, Wealth Advisor
March 24, 2022 —
You might have a financial plan — or at least, you might think you have one.
You might not have a financial plan and can’t possibly see how it would be relevant.
Maybe your thought process is simply any of the following:
- Financial planning is “future me’s” problem…
- My finances are a mess and I trust it will all work itself out…
- I know what I’m doing, I don’t need help…
- I’m going to do what everyone else is doing, I’m sure they’ll turn out fine, just like me…
Pulling together this blog comes at an opportune time.
Along with my colleague Nik Aamlid, CAP®, Wealth Advisor, I am currently working on CFP® certification to become a CERTIFIED FINANCIAL PLANNER™. The process, which will take more than a year to complete, entails extensive studying, test taking, and class work, as we strive to enhance the care we provide our clients.
The thing is, our firm at Pinnacle Wealth believes deeply that financial planning is critically important to live a life of “True Wealth.”
Their support of this certification is proof of that commitment.
You may find yourself asking — what is financial planning?
Secondarily, you might ask, “why does it matter?”
I hope to answer those questions in today’s blog.
OVERVIEW OF FINANCIAL PLANNING
In short, we believe that financial planning is simple: we help our clients get from here to there.
By understanding someone’s financial situation, we hope to take them from where they are, to where they want to go.
A financial journey is just that — a journey.
We’re evaluating the funds, strategies, and assets needed to make the journey and ultimately, complete a successful mission with our client.
This is different from many advisors who don’t offer planning services. They are pursuing portfolio returns and paying little mind to the complexity of people’s financial lives. More on that later.
Financial planning is meant to be collaborative.
Let’s start with an official definition of financial planning from our CFP® training. I really like this definition.
Financial Planning is a collaborative process that helps maximize a Client’s potential for meeting life goals through Financial Advice that integrates relevant elements of the Client’s personal and financial circumstances.
My favorite word in this definition is collaborative.
The path to “True Wealth” is not meant to be one of complete delegation. It is not meant to trek alone. It is a collaborative effort and our passion at Pinnacle Wealth is coming alongside.
Here’s an analogy that I like to use:
You are the owner of an NFL franchise. Pick your favorite team. This is your personal estate. Your financial advisor is the quarterback.
The advisor is the hired gun to help the owner achieve their goal of a Super Bowl. The quarterback has skills that the owner might not have.
The “hired gun” terminology, however, is nuanced. The player and owner need to have personalities and philosophies that jive together to create synergy.
A quarterback cannot succeed under a regime that doesn’t empower him. At the same time, an owner cannot succeed if a quarterback is self-serving and out for their own gains.
The goals must be stated, the game plan must be collaborative, and there must be commitment from both sides to achieve success.
Are you connecting this analogy to your personal wealth?
Apologies if you’re not a football fan! I hope this still makes sense.
HOW OTHER ADVISORS APPROACH PLANNING
Many other firms do not require themselves to be a fiduciary or CERTIFIED FINANCIAL PLANNER™ practicioner on behalf of their clients.
Frequently, many advisors only help people in certain classes.
I know of a few prominent firms that will divide their financial planning services into:
- People with “more than $250k in assets,” and;
- People with “less than $250k in assets.”
The two groups receive different levels of care and access to different financial products.
If a client doesn’t meet these thresholds, they may charge up front for their financial planning services.
At the end of the day, we work with clients both big and small and our financial planning services are baked directly into our management fee. No frills, nothing hidden. We’re here to help.
So, what does our planning process look like?
PINNACLE WEALTH’S PLANNING PROCESS
With proper financial planning being so critical, we’ve developed a detailed process we hope to take all of our clients through.
Our process is divided into five simple phases:
- Introduction Phase.
- Discovery Phase.
In my experience, our firm shines during the introduction and discovery phases. We love learning who our clients are, where they’ve been, and the goals they have for their lives.
We look at a person beyond what their numbers represent.
“What would you do if you had 30-days to live?” is a question our firm will often ask. Kevin answers that beautifully here.
“What would you do if you inherited a billion dollars?”
At that point, money wouldn’t matter much. So, what would you do with your time?
We ask what your goals are and more importantly, why are your goals what they are?
This process is all about discovering how assets can serve our clients, not how they can serve their assets.
If you’d like to learn more about this process, we’d be happy to help.
We hope to create a financial life of efficiency to help our clients maximize their potential with their finances.
Efficiency isn’t strictly the relentless pursuit of high returns.
After all, what good are returns when an individual has no goals or dreams for those returns?
Similar to not saving enough money is saving too much.
A life of fully maximized potential is one where a plan understands the holistic goals of the individual and seeks to achieve those goals.
And when the rubber meets the road, trust is key.
It’s important to find an advisor that places your best interests first (a fiduciary).
When building a financial plan, you want a trusted advisor — and team — in your corner with experience and knowledge to help you navigate through the pitfalls you might encounter along the way.
Life is complicated, as is personal finance.
It is our desire to help create clarity in the mess.
Ryan is a non-registered associate of Cetera Advisor Networks LLC.