Financial Planning
JCB Wealth Management was established to provide our clients with personalized service and attention to their unique needs. As a fiduciary, we make a firm commitment that in all circumstances, your best interest comes first. We’re here to listen and create comprehensive financial plans designed for you based upon your individual goals and taking into consideration all aspects of your life, including the particular tax and accounting issues that might affect your plan. Communication -- clear information and honest answers to your questions – is one of our strengths. It forms the foundation for long-lasting relationships and meaningful results.
What is a Financial Plan?
A financial plan is a document that details the strategies to help you reach your financial goals. We all know that a trip goes better if we have a map—or GPS—to guide us along the way and make sure that we stay focused on reaching our destination. A financial plan does the same thing to guide us toward our stated goals.
What are the Steps in the Planning Process?
Whether you choose to begin planning on your own or work with a financial professional, the basic planning steps are the same. Thinking through these steps on your own is solid preparation for consulting with a professional.
- Understand your current financial circumstances. This includes evaluating your present saving and spending habits—knowing where the money goes—and identifying your assets and liabilities.
- Identify goals—short-, intermediate- and long-term. Only you know which goals matter the most to you and what the best timing would be for these objectives to be completed. Short term goals would be completed in less than two years; long term goals would take five years or more to reach; and intermediate goals would be in between.
- Analyze alternatives. Consider the possible courses of action to get you to your financial goals. If you’re working with a professional, you can expect that they will gather relevant information about your current financial condition and use this information to help move through the analysis.
- Develop a plan and recommendations. This is the core of the planning exercise—for yourself or a professional. Considering the various facets of your life—your family, work, age, values, goals, and much more—even taxes—you or your financial planner will develop a clear plan that includes recommendations for actions to take.
- Present the plan. Your financial advisor, after considering the options, will present you with a plan tailored to your needs.
- Implement the plan. This is the stage where the action begins—making investments and taking steps toward an organized movement toward your best financial future.
- Monitor the plan. Financial planning is not a one-and-done exercise. Life moves along and changes will occur—marriage, children, changes in jobs or earning potential, an unexpected windfall, or the loss of a spouse. These and many other events, in addition to economic and market changes will affect your plan and require adjustment.
Financial Planning Assistance
Following the steps outlined above can be a worthwhile exercise, but many people will find that they benefit greatly from the advice and guidance of a financial professional.
Financial planners can come from a variety of backgrounds, with or without financial credentials, and may offer basic services or a comprehensive array of services that address all areas of your financial life. These professionals are regulated in relation to the services they provide. Both FINRA and the SEC offer additional information to help inform your selection of planning professionals.
Certified Financial Planner
The designation CFP, or Certified Financial Planner, recognizes expertise in the areas of financial planning, taxes, insurance, estate planning, and retirement planning. Those holding this designation have completed the CFP Board’s exams and maintain required continuing education. In addition, CFP holders have a fiduciary duty, that is, they must make decisions that are always in the client’s best interest.
Financial Planning Costs
Like any other professional service provider, a financial professional should be able to provide you with a clear explanation of anticipated costs for providing advice or managing your portfolio. In your preliminary discussions, be sure to ask how advisors are compensated.
Typically, advisors are paid in one of the following ways: Commissions or Fees. Advisors who work on commission charge a fee up front, a portion of the money you invest. Advisors who follow a fee-based model could charge an hourly fee, a flat fee for a bundle of services, or a fee based upon a percentage of the account value invested, or assets under management.
Fee-only arrangements generally present fewer of the concerns about conflict of interest that arise when an advisor’s income through commission, is tied to the products sold. Also, fee-based advisors are usually fiduciaries, and held to the higher standard of conduct that includes the requirement to always act in the client’s best interest.
As a consumer of services, be sure to understand how your advisor will be billing for services; it is in your best interest and theirs to have a clear understanding at the beginning of the advisory relationship.
