In a recent conversation with a group of professional women, the discussion turned to retirement. Everyone had a “financial advisor;” someone who invested their money, watched their portfolio. Some had been working with this advisor for years. They trusted him. He (usually it was a male advisor) did stuff to their portfolio, and it seemed to go up in value over time.
But when asked about whether they had enough to retire, no one had any idea.
This wasn’t something their financial advisor covered. They had never had the discussion with their advisor around their needs or goals, what retirement would cost, what kind of life they wanted to lead, or even if they could afford to retire. They really didn’t know if they were on track or would run out of money later in life. They had money, it was invested, but they didn’t know if they were financially ok.
So how do you know if you are on track to retire with the lifestyle you want? There actually is a resource that can make a difference to your quality of retirement. It’s something the uber wealthy have been using for years, and it is something that the rest of us have access to now.
The resource is called a financial planner, and here is why it can make a difference.
A little history first: Family Offices are where the ultra wealthy go for wealth management. According to The New Family Office: Strategies for Consulting to the Affluent, the original U.S. family offices were created by wealthy merchants early in the 19th century who hired trusted advisors to oversee their wealth and provide for their families while they were traveling. Today family offices provide services ranging from all forms of wealth management; tax, estate, and succession planning; trust management and services; and personal services including walking the family dog, hiring nannies for the children, keeping the family calendar, managing vacation properties, yachts, and, paying the bills. By having this resource, wealthy clients can make sure that there is a plan to their current and future financial lives.
While the average professional may not need the services of a Family Office, having a financial planner also provides many of the same resources to help people live their best life now, and in retirement. The importance of the planner is to have someone who creates a financial plan based on the wishes and needs of each client, and to act as a quarterback of sorts for the client’s team of trusted advisors. These might include an accountant, estate attorney, business coach, insurance resource, and therapist, among others. All of these advisors are part of the pieces of the financial plan the planner helps to create for each client so they can live the life they want. If your financial advisor is just investing your money without having a conversation about what your goals are, how do they know how best to invest the money?
Planning for retirement is far more than just investing money.
Are you as tax efficient as you can be? Do you have a tax strategy around your investments and your income? How is your risk management? Are you adequately insured? Executives can be targets for lawsuits, and its critical you have the insurance coverage you need to protect yourself and your family. Do you have a plan for your career or your business? If you are the breadwinner in your family, the success of your career and your business will have vast implications for your retirement options. And what DO you want your retirement to look like? Are you on track?
These are all questions that can be answered by having the right resource, a financial planner.
So, how do you find this person? Where do you start? Start by asking your friends who they use and if they would recommend them. Make sure the person is a Certified Financial Planner ®, which means they are Fiduciaries as defined by the Securities and Exchange Commission, and they have rigorous expertise requirements. Fiduciaries are required to always put a client’s best interests first. While this may seem like an obvious requirement, not all financial advisors are Fiduciaries. You can go to the CFP Board and search for financial planners in your location. Or you can reach out to the Financial Planning Association, who will have a list of financial planners on their Planner Search.
You should also make sure that financial planner is fee-only. This means they don’t receive commission on any investments they buy or sell for clients. By being fee-only, a planner can remove conflict of interest when it comes to making investment decisions for a client. Ask any planner you are interviewing how they get paid, how much they get paid, and exactly what services they provide. Some financial planners provide customized planning, and others provide a more generic one-size-fits-all plan. Know what services they provide, and if it fits for you.
When the conversation about retirement led to discussion of financial planning and the peace of mind that can give, there was a noticeable sign of relief among the group. These were smart, successful professionals who had not known there was a resource that could truly help them live the life they work so hard for now, and in retirement. The key is to find the one that clicks with you, and then get started. Happy planning!
If you’d like to learn how we help our clients live their ideal life now and in retirement, you can contact us.
