Want to live life on your terms? Then find a great financial planner.
We hear from many women who are looking for financial guidance. When we meet with them to discuss what help they are looking for most go straight to sharing how much they’ve saved and how they are invested, because they think this is what financial planning is all about. But it is so much more than just how your money is invested. It’s about how to live the life you want now and into retirement. It’s about how to leverage that business or career you have so that it is fulfilling to not only from a compensation standpoint, but from a quality of life standpoint. It’s about tax strategy, retirement strategy, and how you manage your cash.
Because there is so much confusion about what financial planners and financial advisors do for clients, we thought it would be helpful to outline what a financial planner should be providing you so that you can truly live life on your terms. And if you aren’t getting this kind of help from your advisor you might want to consider if it’s the best partnership for you.
Being a financial life planner means providing financial support and guidance for every facet of your life, and having the resources to help guide you. Looking to sell your business but now sure how best to do that? Want to buy a new house, but aren’t sure how large a mortgage really makes sense, and need a good mortgage advisor? Getting married and not sure how much to spend or where to get the money to pay for it? Do you know if you have enough homeowners insurance? Can you minimize the taxes you pay?
Financial life planners are like the quarterback on your financial planning team. They’ll bring in trusted advisors in areas where a client needs attention and collaborate with the advisor on a strategy for that clients. They identify the client’s overall wants and needs, where the client is now, gaps they see, and the resources needed to solve the problems. Their comprehensive process helps you to have a plan that allows you to live life on your terms. But not all financial planners are created equal. Make sure your advisor is providing you these valuable services:
Communication
When is the last time you heard from your financial advisor? Do they even know if you got divorced two years ago? When you do speak, does your advisor listen? Can you pick up the phone and call her when something comes up? Communication is critical, so make sure you find a planner who will provide the level of communication that is important to you.
Customized budget creation and monitoring
We believe how you manage your cash flow is one of the biggest derailers for women executives to live life on their terms, so knowing where your money goes is important. Especially if you know this is a tough area for you, make sure your planner will provide guidance here. For business owners and 1099 employees, managing cash flow with irregular income can make the difference between funding goals and winding up in the red. If debt is one your challenges, debt management strategy is another area where your planner can help.
Help with funding goals
Are you on track to retire with the lifestyle you want? Want to pay for college for a child? Not sure how much it will cost, how much you can afford to save? Or maybe you want to save for more than one goal, but aren’t sure how much you can set aside while still saving for retirement. Your planner should help you prioritize what is important, what you have to work with, what gaps exist, and what the incremental plan of action is so you can reach your goals.
Career and Business planning
This is another one of the most critical determinants for reaching your goals and living life on your terms. How you leverage your career or business for compensation and for quality of life is critical. Your planner should help you assemble a team that might include career and business coaches, business development experts, business attorneys, succession planning guidance, Human Resources consultants, industry specific executive placement firms. Many planners also provide a networking component for clients such as monthly gatherings to promote collaboration in business and peer to peer mentoring and support.
Lifestyle and quality of life resources
Because money doesn’t make people happy but is a very necessary tool for life, providing resources to clients on quality of life should be a focus for planners. This may include referral sources such as meditation and wellness experts, nutritionists, and fitness experts.
Tax strategy
One of the most important people on your financial planning team is your accountant. You planner should collaborate with your CPA on how to minimize taxes, and make the smartest tax moves for a client and their business.
Personalized retirement strategy
Not sure how much money you need to retire? Not sure when you can retire? When is the best time for you to take Social Security? What happens if the stock market tanks? This is the one area most folks think of when they look to a financial planner for help. You’ll want someone who can create a retirement plan for you that allows you to live a decent life now, and into the future so that work can be an option.
Risk management
Not sure if you need life insurance? Do you have enough auto insurance? Are you adequately protected if something goes south? Have a parent that needs long term care insurance? All of these issues can severely impact your financial security. Make sure you are getting direction on how to manage these potential minefields.
Estate planning
If something were to happen to you, is your family protected? Are your wishes written down? Or would the state make choices for you? If you don’t already have an estate plan in place, your planner can work with an estate planning attorney on crafting an estate plan that covers your wishes.
Life transitions
Life happens, so it’s good to have a resource that can help you weather any storm. Whether its divorce, death, job transitions, or any other major life change, your planner can help you navigate the storm. Many have curated a list of resources they can direct you to and collaborate with.
Investment management
We intentionally put this last because you cannot possibly choose investments without knowing the purpose of the money you are investing. Investment management is an important tool, but it should not drive the planning process. Seek out a planner who keeps your costs to a minimum here. We like liquid, low cost, tax efficient investments that are based on the goals you want to reach. You’ll want to make sure your planner is Fee-Only so they have the ability to choose any investments in the investing universe, without getting commission, and that are best for you.
These are what a financial planner should be providing. Is this what your planner provides? If not, ask what you are paying for. It’s your right to know. And it’s in your best interest to get the best guidance possible so you can live the life you want.
You can learn more about how financial planning can help you live life on your terms in our new book Corner Office Choices: The Executive Woman’s Guide to Financial Freedom. You’ll find questions to ask when interviewing financial planners in the Appendix of the book. And if you would like to learn how we help professional women live life on their terms contact us at WealthChoice.
