What’s the difference?
When people first hear that I am a financial planner, more than 80% of them immediately ask, “Where should I invest my money?” Over the years, I developed the enclosed flow chart to show why this is really the last question you want to ask, rather than the first.
For example, I recently received a call from a prospective new client. This gentleman had inherited some money in a trust. He told me that the ultimate beneficiary of the trust is his 30-year old daughter, and asked me to come up with an investment proposal. Since all good advice begins with understanding, I asked him if he would send me a copy of the trust. We then scheduled a meeting, where I’m sure he expected me to present him with a proposal of where to put the money. I was fairly certain however, that once I received and read the trust, I would have more questions; as the first step in proper planning is “Identify, Quantify, and Prioritize Goals.”
Sure enough, the terms of the trust identify him as the primary beneficiary of the money for his lifetime. His daughter receives whatever remains in the trust at his death. It also turns out that his financial circumstances are such that his family would benefit from the more immediate use of some of the money from this trust. There are plenty of other assets available for his daughter when he passes away. As you might imagine, the investment plan that will eventually come from this set of facts is far different from the one I might have designed if our main concern was what his daughter might get several decades from now.
As we were setting up our next meeting where I will, in fact, present an investment proposal, he said, “None of the other people I spoke with asked me any of these questions.” My answer is simple. A financial planner approaches investments far differently than other money managers or financial professionals. It is my job to see the whole picture before I make recommendations.
Sincerely,
Glen Janken, CFP®, CLU |
