Contributed by: Kelsey Arvai, MBA, CFP®
In a world where financial decisions can often feel overwhelming and complex, the role of a financial planner stands out as a guiding beacon, offering expertise and tailored strategies to help individuals achieve their financial goals. Whether you're aiming to buy a home, save for retirement, or planning for your children's education, a financial planner can be an invaluable asset in navigating the intricacies of personal finance. In this blog, we'll explore who financial planners are and what they do.
Who are Financial Planners?
Financial planners are professionals who specialize in helping individuals and families manage their finances, make informed decisions, and plan for their financial future. We possess expertise in various areas of finance, including investment management, retirement planning, tax strategies, estate planning, insurance, and more. Our primary objective is to understand clients' financial situations, goals, and risk tolerances and develop comprehensive plans to help them achieve their objectives.
What Do Financial Planners Do?
Goal Identification & Determining Net Worth: Financial planners begin by assessing clients' current financial status, including income, expenses, assets, and liabilities. We then work with clients to establish short-term and long-term financial goals, such as buying a home, saving for retirement, or funding a college education.
Financial Planning: Based on the client's goals and financial situation, planners develop personalized financial plans that outline strategies to achieve those objectives. This may involve budgeting, investment management, tax planning, risk management, estate planning, financial independence review or retirement income analysis, charitable planning, college planning, preparing future generations for wealth management, and coordinating with multiple advisors (i.e., CPA, attorney, etc.).
Investment Management: Financial planners help clients ensure their investments reflect their objectives, risk tolerance, and time horizon. We may recommend specific investment vehicles, asset allocations, and diversification strategies to help clients maximize returns while managing risk.
Retirement Planning: Planning for retirement is a significant aspect of financial planning. Planners help clients estimate retirement expenses, determine retirement savings goals, and develop strategies to accumulate retirement assets through vehicles such as employer-sponsored retirement accounts (e.g., 401(k), IRA), pensions, and other investments.
Risk Management and Insurance: Financial planners assess clients' insurance needs, including life insurance, health insurance, disability insurance, and long-term care insurance. We help clients select appropriate coverage to protect against unforeseen events and mitigate financial risks.
Estate Planning: Financial planners assist clients in ensuring their beneficiary designations are properly set up on accounts, including retirement, checking & savings, brokerage accounts, and life insurance policies. Estate planning documents (wills, durable power of attorney, health care power of attorney, and trusts) are drafted by an Estate Planning Attorney. Your Financial Planner will help to ensure that you work with an attorney when appropriate and that your estate plan is reviewed at least every 3-5 years.
Regular Reviews and Adjustments: Financial planning is not a one-time event; it's an ongoing process. Planners regularly review clients' financial plans and adjust as needed based on changes to your financial situation, goals, and market conditions.
Financial planners play a vital role in helping individuals and families navigate the complexities of personal finance, achieve their financial goals, and build a secure future. Financial planners empower clients to make informed decisions and take control of their financial well-being by providing expertise, personalized advice, and ongoing support. When choosing a financial planner, it's essential to consider their qualifications, expertise, and alignment with your financial goals and values. With the right planner by your side, you may embark on your financial journey with confidence and clarity.
Kelsey Arvai, MBA, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc.® Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.