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Financial Planning - Fantasies & Facts

Fantasies and Facts

You are the focus of the financial planning process. The results you get from working with a financial planner are as much your responsibility as the planner’s. To achieve the best results, you will need to be prepared to avoid these commonly held fantasies about financial planning.

Planners come across clients who:

  • Confuse financial planning with investing
  • Neglect to set measureable financial goals
  • Neglect to evaluate their financial plan periodically
  • Think financial planning is the same as retirement planning
  • Expect unrealistic returns on investments
  • Don’t understand how advisors are compensated
  • Are looking for a quick financial fix instead of a long term strategy
  • Don’t understand that good professional planning advice is largely dependent on good information from clients
  • Believe financial planning is primarily tax planning
  • Think they’ll lose control over their decisions if they use a planner

When seeking professional financial planning advice, expectations often vary. Avoid giving in to the fantasies by considering the following facts:

Financial planning uses a big-picture approach

Each financial decision you make may affect several other areas of your life. An investment decision can have tax consequences harmful to estate plans; a decision about a child’s education may affect when and how you meet your retirement goals. Financial planning is an ongoing process that takes all your objectives into account. Remember that all of your financial decisions are interrelated.

You must re-evaluate your financial situation periodically

Financial planning is a dynamic process. Your goals may change over the years due to changes in your lifestyle or circumstances, such as birth, inheritance, marriage, house purchase or change of job status. Revisit and revise your financial plan to reflect these changes so that you stay on track.

Investing in a plan is investing in your future. A professional financial planner can help you increase your chances of making that plan a reality.

To know what to expect from your engagement, the right questions must be asked

When working with a financial planner, be sure you understand the process and what the planner should be doing. Ask how the planner is being compensated. Provide the planner with all of the relevant information on your financial situation. Ask about the recommendations offered to you and play an active role in the decision making process. Remember, you are in charge.

Your expectations must be realistic

Financial planning is a common sense approach to managing your finances to reach your long-term goals. It can’t change your situation overnight; it is a lifelong process. Remember that factors beyond your control such as the stock market, inflation, or interest rates will affect your planning results.

Achieving your goals is the bottom line

Life is hectic and all too often we get sidetracked from reaching our life goals. Nonetheless, proper planning that includes a relationship with a financial planner who helps you articulate your goals and then prepares a plan that will help you meet them will greatly increase your chances of being financially prepared to handle both the expected and unexpected.

Investing in a plan is investing in your future. A professional financial planner can help you increase your chances of making that plan a reality.

Reprinted from (
Published by Financial Planners Standards Council (FPSC),
2007, reprinted by permission.

Financial Planning is offered through Credential Asset Management Inc.

†Mutual Fund Disclaimer

PlanWright Financial is a wholly-owned subsidiary of Encompass Credit Union

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