Tips for Success: Financial Planning Advice

Your financial affairs are ultimately in your hands, and the outcomes you achieve when working with a Certified Financial Planner can be significantly enhanced when you avoid common errors. Next Gen Financial Planning is pleased to partner with organizations that help our communities, clients and team as well as profession flourish. Located in San Diego, CA retirement planning focus on placing clients’ best interests first by offering transparent pricing based on fairness rather than what we think can be accomplished with money. Furthermore, as an independent fee-only firm we accept direct payments from clients without commissions, kickbacks or referral charges being added onto payments; Next Gen Financial Planning was founded by Steven Fox who is registered investment advisor in California.

Setting goals in the cloud

While clouds don’t provide the only option for goal setting, they do seem like an appealing concept; unfortunately they often can’t become reality; lottery targets for instance. Instead, set specific goals that you would like to attain and the timeline in which they should come to fruition – rather than vague statements like wanting “comfortable retirement living arrangements or good schools for your children – that allow you to accurately gauge when your objectives have been achieved – what does “comfortable living arrangements” or “good schools” mean exactly? Does “comfortable” living means living in a house worth $250,000, $500,000, $1.5 Million dollars? Or is a good school worth 7k/year? Or is a school worth 7k/year? $30,000/30,000/30K/year?

Understand the effects of each financial decision

Each investment decision you make will have ripple-effects throughout your life, from taxes and estate planning, to education costs affecting retirement goals and more. All financial decisions have a ripple effect that impacts other areas.

Reevaluate your finances periodically

Financial planning is an ongoing process that must adapt with changes to lifestyle and circumstances – like receiving an inheritance, getting married, having children or changing job status. Review and update your plan as time progresses to make sure it remains on course to meeting long-term objectives. A Certified Financial Planner(r) expert may offer tips that help you accomplish this.

Start planning as soon as you can

Start saving early and regularly. Individuals who save or invest even modest sums early tend to outperform those who postpone saving for later. By creating solid financial habits such as budgeting, saving, investing, and reviewing regularly their financial position you will be better equipped for unexpected life events or emergencies.

Be realistic in your expectations

Financial planning relies on common sense when it comes to managing your money. Though you won’t see instantaneous changes to your situation, over time you should notice improvements. Remember that factors beyond your control – inflation rates and changes to stock markets can have an effect on the results of financial planning efforts.

You are not alone

Just as it would be beneficial to seek medical advice when necessary, financial guidance may require the advice and assistance of a certified financial planner (CFP(r). Working with one ensures you receive consistent advice throughout your planning journey.

Realize that you are in charge

Make sure that when working alongside someone who is certified financial planner (CFP(r), that you understand the process of financial planning. Ask questions regarding any advice provided to you and take an active part in decision-making processes.

Questions to ask the financial advisor

Here are a few questions you could pose to your potential partners:

  • Who are your typical customers?
  • How will we communicate with each other?
  • How much will I pay and how is that number determined?
  • How are you compensated?
  • Are you compensated for recommending certain products?
  • How do you choose investments and products for your clients?
  • If charged an annual percentage, will it be billed quarterly or monthly?
  • Do you charge by the hour?
  • Do you have a fiduciary duty to your customers?

What is a fiduciary?

The fiduciary duty of care (or fiduciary standard), otherwise known as fiduciary obligation, requires financial advisors to put their clients’ needs above their own interests when it comes to making recommendations that may reduce earnings for themselves. Though many professionals qualify as “financial advisors”, only some must abide by this legal mandate.

Registered investment advisors and brokers alike are subject to this standard; critics, however, maintain that brokers do not meet this obligation despite recent regulations designed to enhance it. When hiring an advisor in financial services to select or invest on your behalf or select financial products on your behalf it may become particularly relevant; for advice such as setting monthly budgets it might not matter as much.

Do not hesitate to inquire of prospective financial advisors whether they provide fiduciary financial advice. Inquire how their compensation works as this could have an enormous effect on both your net worth and future.