The last weeks of the year are a good time to reflect on what we have achieved over the past twelve months. They are also a time to think about where we could improve. If you have put off addressing your personal finances, here is how working with a financial planner can help you reach your goals in the new year.
- Setting up the ground rules. When you meet with a financial planner, the first objective is to establish the services you need and define the scope of the relationship. Any conflicts of interest should be disclosed at this time. You should leave the first meeting with a clear understanding of your responsibilities, the role the planner will play, and how they are paid.
- What are you planning for? For a financial planner to help effectively, you need to define your personal and professional goals. Whether you are saving for college, preparing for retirement, or planning to open a business, a planner can help you prioritize. It is important for the planner to understand your background, needs, and values so the plan is one you will stick with.
- Start with what you have. A financial planner will work with you to see what you already have and how you are managing your cash flow. Many of us have self-directed investment accounts, retirement plans from an old job, investment products bought through a bank, or insurance policies that haven’t been reviewed in years. A planner looks at the big picture to make sure these accounts line up with your goals, and that you are contributing toward those goals regularly.
- Bringing it all together. The planner then determines whether your current course of action is enough to reach your goals and, if not, recommends alternatives. The assumptions behind each recommendation, and the potential risks, should be clearly explained.
- Putting the plan to work. Once the plan is set, it’s time to act. That could mean changing investments or insurance policies or bringing in outside professionals when needed.
- Making changes and being proactive. A financial planner will monitor your situation on an ongoing basis to make sure you are following through. When life changes, your plan should too. A good planner will help you anticipate those changes, adjust when necessary, and take the emotion out of important financial decisions.
Before the year ends, take a look at my year-end planning checklist. Then take the initiative and speak with a financial planner to help you make the most of the year ahead.
All the best in the new year.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
