Take the Opportunity to Get Your Finances in Order
According to a recent survey, about one of every three Americans has some type of written financial plan. Those who don’t often assume their estate is too small, that the process is too complicated or that putting a financial plan together will take time that they don’t have to give.
The reality…almost everyone can benefit by identifying financial goals, and by formulating and implementing a financial plan. Every year, the first Wednesday in October is designated as “World Financial Planning Day,” specifically to increase awareness of the benefits of financial planning and how consumers can find financial planning professionals.
What Is Financial Planning?
Financial planning is a specific process that helps individuals and families identify long and short-term financial goals and develop strategies to meet those objectives. The process typically involves:
- An assessment of your current financial situation, including all assets, liabilities, investments and insurance
- Identifying short and long-term financial goals, such as retirement, college funding and estate planning
- Evaluation of the different strategies for meeting your goals, including risk assessments
- The formulation and implementation of a written plan to achieve those objectives
Is a Financial Advisor the Same as a Financial Planner?
No. A financial advisor will help you manage your money, whether it’s in a retirement account or an investment portfolio. A financial advisor will typically work with you to establish your risk profile and make recommendations to achieve your goals within those parameters. A financial advisor may also facilitate the purchase and sale of investment products within a retirement fund or portfolio. Your financial advisor tends to focus on a very narrow portion of your finances.
A financial planner, though, will commonly take a comprehensive approach to your finances, helping with all aspects of your financial life, from budgeting to the purchase of insurance, from investing to helping you ensure that you have the proper estate planning documents in place. Whereas financial advisors tend to be focused on specific transactions, financial planners typically take a more holistic approach.
National Financial Planning Week was established to remind people to do a review of all their finances at least once a year. If you need to, please reach out to your financial advisor to determine an appropriate course of action.
