What is Personal Financial Planning?
“Personal financial planning” is an independent analysis and assessment of a client’s current financial situation, as well as a “roadmap” for the achievement of financial and life goals. It is an evolving, ongoing process, not a one-time “event,” and generally consists of the following steps:
- Establishing the client-advisor relationship
- Gathering client data and determining goals and expectations
- Analyzing the client’s current financial position
- Developing and presenting recommendations
- Implementing the recommendations
- Monitoring client progress
How Do You Create This Roadmap?
Together, the client and advisor review goals, objectives, priorities and values. These typically encompass both financial and non-financial matters. Even if a client is well-positioned financially, he or she may need professional insight and an unbiased “second-opinion” to stay on track.
All of our engagements begin with data gathering and a review of the client’s current financial situation. Depending on the scope of the engagement (broad-based or targeted), specific areas such as cash flow, investments, employee benefits, retirement planning, and insurance are analyzed in order to develop appropriate, customized recommendations. Planning reports are individually tailored to each client’s unique situation and needs; there are no “canned” financial plans.
Traditionally, such services have been directed to very high net worth individuals via a comprehensive “percentage of assets under management” approach. We extend the tremendous benefits of “fee-only” to a broader client base, and find that this approach appeals to people with IRAs, investment accounts and employer-based retirement savings plans such as 401(k)s, 403(b)s, pensions and deferred compensation plans.
What Distinguishes Your Firm from Other Financial Advisors?
First and foremost Nest Builder Financial Advisors, Ltd. is a pure fee-only (not “fee-based”) firm, meaning all compensation is received directly from the client. Referral fees and commissions are not accepted; there are no product-based incentives or conflicts of interest. Unbiased planning and advice always come first. Furthermore, we are fully independent, and have no financial ties to brokerages, insurance companies, and other product providers. Services rendered are grounded in objectivity and stewardship, and recommendations are based solely on client needs.
Another distinguishing feature is the fiduciary character of the Nest Builder-client relationship. Financial advisors are ethically obligated to always work in the client’s best interest, and we fully embrace this responsibility. Fiduciary duty is what truly defines a professional, and written attestation and disclosure thereof should be a minimum licensing requirement for every financial advisor.
Finally, we perform both broad-based and limited scope engagements. Clients with a simple, uncomplicated financial picture may be better served with a limited-scope engagement while those with various types of accounts, higher taxes and more complexity may be better served with a broad-based retainer option. Clients are strongly encouraged to schedule regular updates. In all cases the client retains full custody and control of his/her portfolio, and is responsible for implementation of advice and recommendations. Assistance with implementation is available, if needed.
If You Don’t Sell Products, How Will I Get What I Need?
While Nest Builder Financial Advisors, Ltd. does not “sell” products; specific recommendations are offered, as needed. Wherever possible, cost-effective “no-load” vehicles are utilized, and can be obtained directly from the provider or a discount brokerage. If more extensive insurance or legal services are required, we can assist with locating reputable local resources, and with review and implementation of their recommendations.
How Do You Price Your Services?
We offer a complimentary get-acquainted meeting that allows us to clarify the scope of the engagement and we will generally provide a tailored fee estimate for you at the end of the meeting. The fee for most broad-based plans is $4,000, however it may be more for complex situations.
Financial and investment planning must be viewed by the client as a long-term investment, not a short-term expense expected to pay for itself right away. While this may occur, it is not the intent of the planning process. For most people achievement of financial security is a marathon, not a sprint, and the value of professional, objective planning and advice should be evaluated in that context.
Do You Provide References?
Under Rule 206(4)-I advisors are generally prohibited from utilizing advertisements that use, directly or indirectly, testimonials of any kind. While the rule does not specifically define testimonials, a testimonial usually includes any favorable statement by a current or former advisory client. In lieu of references, we offer a complimentary get-acquainted meeting. This meeting provides us a chance to get to know one another and for you, the prospective client, an opportunity to determine if we are a good match for your needs.
Do You Pick Stocks, Like a Broker?
We generally do not recommend specific stocks or bonds. However, if a client owns individual securities, we will analyze them in the context of the total portfolio, and offer suggestions for adjustments and diversification, as appropriate. Specific recommendations are generally focused on no-load mutual and index funds, exchange-traded funds, and options available in the client’s retirement/savings plans. The fiduciary philosophies, cost-effectiveness, tax-efficiency and historical performance of successful investment managers are key factors in determining specific recommendations.
Please Describe Your Investment Philosophy and Approach.
Emphasis is placed on the design and construction of diversified portfolios. The turmoil experienced during bear markets and financial panics bears witness to the timeless wisdom of owning multiple asset classes, market sectors and investment “styles.” No one can consistently and accurately predict volatile, short-term market moves and sector rotations.
All written content on this site is for informational purposes only. Opinions expressed here are solely those of Mary Erl. Material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual advisor prior to implementation. Links to other sites endorsing a stock or other investment should not be construed to be a recommendation by Mary Erl., Fee-only financial planning and investment advisory services are offered through Mary Erl, a registered investment advisory firm in the state of Illinois. The presence of this web site on the Internet shall in no direct or indirect way be construed or interpreted as a solicitation to sell or offer to sell investment advisory services to any residents of any state other than the state of Illinois.
If you have any questions, please don’t hesitate to contact us.
Mary Erl at Mary@NestBuilderFinancial.com or call (847) 855-4483.