A&I Wealth Management > Blog > Families > The Value of Financial Planning

“We want to provide for ourselves, not spoil our “adulting” children and we also worry about our aging parents. Can you help us?” 

Scott and Marjorie

Many people believe that a financial planner is synonymous with an investment advisor, financial advisor, insurance agent or stockbroker. The truth is that a financial planner does a lot more than just pick stocks or allocate investments.  Keep reading blow to learn some of the benefits of working with a financial planner!

What many people believe a financial planner helps with:
pick investments
However, here is just some of what a financial planner helps with:

Why do misperceptions persist?

The investment industry is a powerful marketing machine

The investment industry is wealthy and has a powerful marketing machine. They spend time and energy convincing their audience that the investment portion of a person’s life is important, and their particular way to do it is the best way. The truth is that investments are a key part of your financial life, but that all financial aspects are important. Investments, in alignment with your long-term, real-life goals, values and relationships, are an unalloyed good for the world.

Financial media have conflict of interest

Financial media have conflicts of interest, with the majority of their income coming from the investment industry in the form of advertisements, sponsorships, research and more. The financial press encourages short-term thinking, with promotion of hot stocks to buy today. Furthermore, doom-and-gloom headlines capture more attention than long-term, positive, boring truths, like equities grow faster than bonds over time.

Investors are not taught financial planning in public school

Unless they attend a college specializing in finance, they likely did not receive much or any personal financial education in college. Many people are autodidactic, and with so much of the information coming from biased sources, find it difficult if not impossible to put together a coherent financial plan.

Many are free to use the phrase "financial planner"

Stockbrokers, investment advisors, financial advisors, and insurance agents are all free to use the phrase “financial planner,” further confusing the issue. Even if they are paid a one-time commission, and never provide another piece of advice, ever again, for their customer, almost anyone can say they are a financial planner. The true financial planner shows professionalism, commitment, ongoing education and builds and contributes to a financial planning team.

Government regulation makes it more confusing

Regulation from the government makes it even more confusing, even if it is well-intended. Recent regulations attempt to force some “bad apples” to behave better with laws that cause a broker to act in the “best interests.” Most people are confused about whether it makes a difference. In fact, if every person in the industry is a fiduciary, then what is the difference between the good apples and the bad?

Here is a five-step solution

To put together a practical financial plan that helps you achieve long-term, real-life financial goals, follow this plan:

  1. Financial planning takes into consideration the entirety of a family’s financial lives.
  2. The planner follows a process.
  3. The investments pay homage to the plan.
  4. The financial planner has certain beliefs that inform the planning process.
  5. The financial planner has a team of experts to rely on for advice outside of the planner’s expertise.

Client Stories

Client stories included on this website reflect hypothetical client situations that represent
those commonly encountered by AIWM representatives, they do not reflect actual client relationships.
How do we provide for ourselves without spoiling our "adulting" children?

Scott and Marjorie raised two sons, which was exhausting at times and amazing in retrospect. As empty nesters, they faced a number of challenges, of which finances were a big part. They found themselves arguing over small things that never used to bother each other when the boys were at home, and money exaggerated the differences. Scott was ready to retire, and Marjorie was ready to re-enter the workforce after two decades at home raising the children. Sometimes, they felt like the additional money she might make was not worth the extra stress it was causing their marriage. They came to the financial planner looking for some mathematical answers:

How long does she have to work before we can both retire?
How much income can we expect to retire with?
How many assets are enough?
Listed and sold the business
How should we be invested—should we get more conservative with our money?
How do we keep our kids from being spoiled?

The financial planner took into consideration all of their concerns and asked even more questions they had not thought of. These questions include, what happens with the money if something happens to both Scott and Marjorie? What about a health emergency? During the discovery process, the financial planner learned that their parents are aging, they have poor health, and Marjorie and Scott may have to step in to help them. They had largely avoided talking about this issue with the other adult children, and it was causing stress between the two of them.

With the help of their financial planner, they put together a plan that helped Marjorie and Scott make good decisions and be confident in their work-life schedule. They helped the couple have conversations with their aging parents, and their “adulting” children. They put together a plan for Marjorie and Scott to provide for their own well-being if something were to happen to either one of them.

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    About the author

    Karl Frank, Certified Financial Planner ®, MSF, MBA, MA, is the President of A&I Financial Services LLC, a local business that specializes in wealth management, insurance planning, and retirement planning. Karl cares for business owners and the businesses that care for them. Learn More about Karl.