Financial Planners Know You Before You Are Even A Client

A financial planner's work life is filled with days making assumptions; assumption about investment returns, future tax and inflation rates, life expectancy, and so on. The process of financial planning does not exist without accepting that many assumptions must be made and that these assumptions will prove to be close in the long term even if very wrong in the short term. However, many financial planners make a series of assumptions about you before they ever meet you... entirely unnecessary assumptions.

If you have hired a financial planner, recall the data collection form you likely filled out or a discussions you held at the beginning of the relationship. Questions revolved around your current assets and liabilities, cash flow, current insurance products, any wills or trusts current in place and your short- and long-term goals. The goals asked about would have dealt with when you hope to retire and with how much income, what your investment return expectations are, what you would like to happen when you pass away and possibly what material possessions you hope to gain. The goals questions may have given you the opportunity to indicate "Not Applicable" if you felt a certain goal was not relevant to you.

However, the planner has already assumed this list includes the goals you should and will have. They have assumed retirement as a goal, that minimizing taxes both during life and at death are important to you, that you want to be able to maintain a similar lifestyle if you became disabled and so forth. These decisions have been made before you entered the door. Each planner has his own list, but very few enter a relationship with no list.

These lists do include items which generally are planned for, but why the rigidity? It can make a planner's job easier and, frankly, more accurate. Having to start planning analyses from scratch for each client requires far more time, thought and attention to detail. I suspect, however, that you want to plan for your future, not your planner's ideal future.

So, what list did your planner provide? Or if you are planning on hiring an advisor or planner, what list are they giving you? Be aware of their assumptions and how they may impact the financial advice you receive.


financial planners orlando said...

I shifted in Orlando and thinking to pursue a career in financial planning. I want to know if university in there provide scholarship and for that how much eligibility it had to take.

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