We have determined that personal financial planning is a process that results in peace of mind. Furthermore, we have established the process involves seven steps. Each step requires time and knowledge. Moreover, it is important to take each step sequentially.
The first step is to engage in the process.
To start, decide if you will do it yourself or engage the services of a professional. If you elect to engage a pro, then I suggest you choose a fiduciary. A fiduciary is legally required to place the best interest of their client first at all times. This carries the inherent duty of loyalty. A fiduciary will expose and eliminate any and all conflicts of interest with their client. It’s my opinion, anything less should be a deal breaker.
To establish a professional relationship based on trust and trustworthiness it helps to set expectations in advance. The following five areas are very important to discuss with any potential fiduciary that you are considering as a your financial planning consultant.
First, identify your needs.
Do you know your financial needs? A qualified fiduciary will ask questions and listen to you.
Second, define the scope of engagement.
A qualified fiduciary will help you determine your major financial objectives and discuss their areas of expertise.
Third, describe responsibilities.
You have responsibilities as the client. Your financial planning consultant also has responsibilities. Other professionals may also be involved in the financial planning process.
Fourth, discuss compensation arrangements.
A qualified fiduciary receives compensation only from you for providing financial planning services.
Fifth, establish the term of the engagement.
Your financial objectives will determine if the engagement is a term of six months, a year, two-years, or ongoing.
QUESTION: Do you know your financial needs?
Chris Bryant is an American financial advisor.