Do I Really Need a Financial Planner?

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How do you know if you really need a financial planner? Frankly, a financial planner is a good idea for nearly everyone who has assets. Once you have assets such as a house and any investments or retirement funds, you need to make sure you are maximizing your options and protecting yourself from risk. 

Ready to discuss your future with a financial professional? Contact ARQ Wealth Advisors to see how we can help.

It can be especially worthwhile if you have had sudden changes in your assets (such as an inheritance or a large bonus) or in your life (planning for a new house, getting married or children). 

It can also be beneficial if you feel that you need help. Some people like to manage their own financial decisions, but others aren’t sure they are making the right moves or may feel entirely at sea in some aspects. 

Let’s face it, finances can be complicated! It’s not uncommon to feel that you aren’t sure how much to save for a comfortable retirement, for instance, or to not be aware of the best college savings plans for children. Financial planners can help in all these aspects of your life.

What Does a Financial Planner Do?

In determining whether you need a financial planner, it’s helpful, of course, to know their range of services. Financial planners need to look at your finances holistically. Traditionally, they look at six areas.

  1. Your monthly income and expenses – Financial planners should review your monthly income and expenses. The balance between these two is crucial to understanding your finances overall. If you have debt, they will advise you on the prudent management of it. They will also look at your overall disposable income to ascertain how you can achieve your goals.
  2. Your investments – A financial planner will review your investments and advise you on an optimal asset allocation for your portfolio given your risk tolerance, age, and goals. They also advise you on maximizing your portfolio going forward.
  3. Your retirement – A financial planner will review your retirement goals and advise you on retirement savings, including tax-advantaged savings such as individual retirement accounts (IRAs) and 401(k)s. They will also give your tax planning advice related to your retirement plans.  
  4. Your insurance – Insuring your assets (real estate and other possessions) and having a sufficient amount of life insurance if you have dependents are a crucial part of risk management, ensuring that you are adequately compensated if anything happens to your assets.
  5. Education planning for your dependents – The financial plans of parents and even grandparents should include planning for children’s and possibly grandchildren’s higher education costs, including savings vehicles and tax planning. 
  6. Planning for your estate – Anyone who has assets should also have an estate plan, including a will that specifies where and to whom they want their assets to go. Many estate plans also include powers of attorney should you become unable to make financial decisions later in life due to incapacitation.

As you can see, these six areas can all be complicated, and it can be challenging to be on top of maximizing each area – or even knowing what decisions need to be made. A financial planner can advise you on key elements of all these areas.

At ARQ Wealth Advisors we have an assessment that incorporates all of these 6 areas. We call it our Q Form™ Assessment. By completing this assessment we can better help you plan your financial future.

Your Goals and Plans

A financial planner should also know your goals and plans. Knowing your goals will help the financial planner optimize your financial life do obtain those goals. 

Do you want to retire early, for instance? Is a growing family making a larger home seem like a good idea? Or, are you saving up for your first home? Do you want to travel extensively? When do you plan to retire, and what do you plan to do during retirement?

A financial planner should periodically review your goals and plans to see if they have changed – which will almost certainly happen over time. If you get married and divorced, for instance, the disposition of your assets could change. So could your investments, your plan for retirement and your estate planning. Similarly, transitions such as deciding to start a business, moving to another area or retiring earlier or later all could impact your financial plan.

What Should You Look for in a Financial Planner?

Okay, now that you’re convinced you do need a financial planner, what should you look for? It’s prudent to make sure that they have the following attributes.

Follows a Fiduciary Standard

Look for a financial planner who follows a fiduciary standard. Fiduciaries must act toward you with loyalty and good faith and are mandated to make every move to adhere to your financial best interests, even if those moves are not in accordance with their own best interests. They must disclose any conflict of interest.

Most people think that financial planners – and advisors about money generally – act in such a way as a matter of course. They may, but only fiduciaries are required to. Brokers and planners who are not fiduciaries, for example, follow a suitability standard rather than a fiduciary standard. A financial planner who works with a suitability standard needs to make recommendations that are suitable for your goals and financial situation. But they do not have to put your financial interests ahead of their own.

As a result, a financial planner who recommends certain stocks or other products, such as annuities or insurance, might be receiving fees and commissions that are higher than they would be with other, similar products. A fiduciary could not do that, because charging higher commissions or fees is not putting your financial interests above their own.

At ARQ Wealth Advisors, we uphold the highest fiduciary standards. We are the only Wealth Management firm in Arizona that has adopted the Institute for the Fiduciary Standard’s Best Practices. 

These ‘Best Practices’ are designed to reflect professional conduct of fiduciary advisors and to assist investors in understanding, evaluating and selecting competent financial advisors and wealth managers. 

Finding a Financial Planner in The Greater Phoenix Area

Despite the number of online-only advisors you might find, it’s a very good idea to work with a financial planner who lives and works in the same area you do. 

Local planners are much more likely to know the financial ramifications of Phoenix and Arizona taxes, property taxes and real estate prices, for instance – all elements that can have a significant effect on your financial planning. They are much more likely to know of any laws or regulations (or proposals) that could affect your finances.

It’s also a good idea to meet in person. That way you can ask your financial planner specific questions about how they work and what their average client is like.

At ARQ Wealth Advisors, our outcome-oriented approach can help make your financial dreams a reality. Contact us today for a complimentary consultation. 

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The opinions expressed in this blog post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. It is only intended to provide education about the financial industry. As always, please remember that investing involves risk of loss of principal and capital. ARQ Wealth Advisors, LLC is a registered investment adviser with the U.S. Securities and Exchange Commission. Advisory services are only offered to clients or prospective clients where ARQ Wealth Advisors, LLC and its representatives are properly licensed or exempt from licensure. No advice may be rendered by ARQ Wealth Advisors, LLC unless a client service agreement is in place. Likes and dislikes are not considered an endorsement for our firm.