There will be a lot of talk in the months ahead regarding mutual fund fees and the cost of financial advice. Investors will soon be able to see exactly how much they pay on their annual statement. This new industry rule is a welcome step towards transparency and will create a more level playing field for advisors who currently get paid the same for providing very different levels of service. We will be starting a series of investor’s education articles in the next few weeks on this subject.

Financial Planners like us do much more than provide quick investment advice. There is a great deal of work that goes into a financial plan and annual financial review. There is a great article that came out this week posted by the Golden Girls.

Here is an excerpt.

“As an advisor who charges a fee for financial planning services, I’ve lost count of the number of times that someone has told me that they could get a financial plan done for “free” at their bank or other institution. Well, perhaps. Usually that involves a 15-minute meeting with the bank’s designated planner, who will typically enter your basic financial details into the bank’s in-house “planning” system, which will then spit out a number of colorful tables, charts, and graphs showing you how long your savings will last in retirement. That might work for some people, but it’s not my idea of a solid financial plan. My motto is, “Good advice doesn’t cost, it pays.

To ensure your financial plan meets your financial objectives, at a minimum it needs to contain the following information in detail:

  • The amount of money that you need to save each year.
  • The asset allocation that would give you the highest probability of maximizing your return with the least amount of risk.
  • Tax planning strategies to minimize your overall tax.
  • Judicious use of credit.
  • Plans for a pre-retirement lifestyle that allows you to have achieve the financial goals to fund the retirement lifestyle that you want.

Reproduced in part from Golden Girls Finance

Read the full article