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October is National Financial Planning Month! It’s a time before the holidays when everyone can take a step back and review their financial pros and cons. Are you on track with your retirement goals? Are there any expected expenses or windfalls on your horizon? October might only have 31 days, but financial planning is a year-round process with many different facets to keep track of. October is National Financial Planning Month – Is Your Plan Set?

 If you’re concerned about falling behind on your financial goals, there’s no time like the present to consider the services of a financial advisor. For many people, the cost of a financial advisor is a prohibitive factor in itself. After all, if you’re spending beyond your means to get financial advice, aren’t you breaking one of the few cardinal rules of money? Yes, you’ll want to be secure with your bills and budget before firing an advisor, but there does come a time when not seeking financial advice becomes the more costly alternative.

Why Do I Need a Financial Advisor?

You might be thinking, why do I need a financial advisor at all? If you’re maxing out a 401(k) and living within your means, you might feel like hiring an advisor is a luxury you can afford to go without. However, this is the wrong mindset to take when it comes to financial planning for the future. The best time to hire an advisor is before you make big decisions – not after.

One of the biggest roles a financial advisor plays is the voice of reason. Your financial advisor can be your conscience, directing you toward the prudent path and away from unnecessary risks and costs. But most importantly, a financial advisor can prevent you from making big mistakes. When it comes to money, most people will be just fine if they get the big things right. Sure, it might feel good to avoid trips to Starbucks and make your own coffee at home, but that won’t matter nearly as much as getting a good rate on your mortgage or purchasing the proper low-cost investments.

Types of Advisors

Financial advisors are like artists – each has a specialty or skill that separates them from the broader class. Some artists work with canvas, others with clay. Some advisors work with individuals and families, others with businesses and institutions. And like an artist, you want the person whose skill- set matches best with the type of service you want. You wouldn’t hire a sculptor to paint a portrait of your family pet, so why would you hire a Chartered Financial Analyst (CFA) to do your income taxes?

Advisors can be broken up into two groups: fiduciaries and non-fiduciaries. In most cases, a fiduciary is usually the better call since these advisors are held to higher ethical and educational standards. A fiduciary advisor can legally only act in the best interest of the client – that means the transparent fees on investments, the use of commission insurance products only when applicable, and no conflicts of interest. Non-fiduciaries can’t take your money and run, but they can recommend investments or insurance policies where they get a healthy cut of the commission as long as the product is suitable in that moment of time. 

10 Questions to Ask Financial Advisors

Fiduciary advisors work in all kinds of environments and industries. The CFA mentioned above usually works in a corporate setting handling large investment portfolios, which is why hiring a CFA for your taxes would be a bit excessive. A CERTIFIED FINANCIAL PLANNER™ (CFP®), who works primarily with household clients, would be better suited for personal income tax planning and other personal financial matters.

Life Events That Trigger the Need For Financial Advice

Sometimes the need for a financial advisor can creep up on you. Life is constantly changing and unexpected events happen more frequently than we like to admit. Ideally, you’d want to employ a financial advisor before any of these events hit, but that’s often not a realistic goal. If any of the following scenarios apply to you now (or in the future), be sure to consider the services of a financial professional.  

  New Job: Career advancement is always a laudable goal and it opens up even more opportunities. You might have loftier benefits like a 401(k) match or extra vacation, plus increased responsibility and prestige. And let’s not forget a pay raise. But lifestyle change can quickly eat away your increased compensation. If you’re moving up the corporate ladder, a financial advisor can help with your present AND future.  

  Starting a Family: If marriage, family, and children are in your immediate future, you might want to consult with a financial advisor. Emotions often run high when planning a wedding or attempting to have a child, but these are huge financial decisions as well. Emotions and money don’t mix, so allow your financial advisor to be an unbiased third party. 

  Children’s Educational Costs: Nothing in life is more fulfilling than children. But the joy of parenthood also comes with responsibility, and money is, unfortunately, a big part of that. Planning for college should start early and you’ll want to know the best place to direct your funds. Is a 529 Plan or Coverdell ESA appropriate? And how do you budget for daycare and other costs while also saving for college? These are key questions an advisor can assist you with. 

  Buying a Home: Few Americans make a larger purchase in their life than a house. And if you’re buying something more expensive than a house, you likely have an advisor on retainer already. A home is a huge financial commitment and it’s wise to seek advice before jumping into a mortgage. 

  Aging Parents: Having our parents reach old age is a gift, but the aging process isn’t just physically taxing – it’s financially burdensome as well. Medical care becomes more frequent and insurance becomes more complicated, so you want to have a plan in place before any adverse health effects set in. 

  Retirement Planning: Finally, you can’t forget about your own finances and future. Saving for retirement isn’t something you plan overnight. Retirement planning is malleable and changes with your goals and wants. What retirement accounts should you utilize? What’s your ideal savings rate? And how will your risk tolerance change over the years? Compound interest works best when you’re getting a bang for your buck and financial advisors can help minimize frivolous costs.

October is here!  Don’t be spooked about tackling your finances and creating financial goals for your future. It may be scary- but it’s so worth it. Now is the time!

Certified Financial Planners™ at Advanced Retirement Strategies

Working with a Certified Financial Planner™ is an excellent investment of your time and money. With the high standards for CFP® certification, you’ll know you’re getting the expertise and knowledge of a highly-trained and educated professional who will always act in your best interests and with the loftiest ethical standards. 

The team of retirement planners and investment advisors at Advanced Retirement Strategies in Bountiful, Utah includes two Certified Financial Planners™ who specialize in helping diligent savers with $250,000 or more of investment and retirement assets (not counting your primary residence) prepare for and then transition into retirement. 

If you’re looking for a CFP® to help you live the retirement you have dreamed of, contact us today.

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