In almost every industry and nearly every aspect of life, it is common to seek out second opinions. They help you decide if you are getting the best value for the services that you are paying for. Second opinions are especially helpful when making important, life-changing decisions. You would get a second opinion regarding medical advice, so why should your finances be any different? A once over from a Certified Financial Planner, or CFP can keep you in top financial health.
If you aren’t sure about the state of your financial plans or its future, take the time to look around for other options. Remember, your financial plan should be specific to you and your business and be tailored to fit your unique goals. Your CFP should look at all parts of your financial life.
If you are debating whether or not you need a second opinion on your financial strategy, ask yourself the following questions:
A CFP can analyze if the advice you’re getting is in your best interest.
As sad as it may seem, not all advisors work with your best interests in mind. Some may simply want to receive a little extra commission on the products, tools, and annuities they sell you, which in turn can tamper with their advice. Unfortunately, it’s not uncommon to be sold on bad advice while the “advisor” gets a bonus. But how can you know for sure if the advice that you’re getting is genuine?
Make sure that your financial planner holds a financial planning designation (the most well-known being from the CFP Board). What is so great about a CFP professional is that they have gone, and will continue to go through, rigorous education — the learning process doesn’t stop after the CFP designation is earned.
Instead of solely searching out for a financial advisor, look for the term ’fiduciary’ advisor or Registered Investment Adviser. A person of one of these titles is legally obligated to put your best interests ahead of their own, unlike a broker-dealer. The ‘fiduciary standard’ is that of total and complete, honest protection.
Last but not least, make sure there are no hidden costs or fees and be upfront with what is in your budget. It’s vital to know exactly how much you are paying for the services that you receive and a reputable advisor will respect that.
A CFP can give you a clear idea of how your portfolio operates.
If you don’t, it’s okay — you are not supposed to be an expert here. However, it is important that your financial advisor explains to you what is and isn’t important within your portfolio. Your financial choices can greatly affect both your short term and long term life, so it’s important to be educated on the basics.
Within your financial portfolio you should:
- Understand the tax-efficiency of your portfolio including asset location, asset allocation, and tax loss harvesting.
- Know the level of risk you have and how that risk intersects with and impacts your short-term and long-term financial goals.
- Be aware of your portfolio’s diversification.
Education of the client is at the core of a healthy financial plan and investment portfolio. At Platt Wealth Management, our ultimate mission is to empower our clients with the knowledge and education to help them understand how their portfolio works and the nuances involved to help keep it running.
A CFP can build a comprehensive financial plan.
Your financial plan should take into account your passions, goals, and pain points. Having a written plan is the first place to start as it will illustrate your goals and how your resources should be maximized in order to help you reach those goals.
Your financial plan should be a roadmap that includes:
- Where you are now and where you want to be
- A detailed timeline on how to reach your future goals
- A backup plan for events such as fluctuating markets, health concerns, or career changes
What a second opinion from a CFP can reveal.
A second opinion will also help you evaluate the costs you are incurring from your current advisor. Is your current financial advisor discovering new ways to save you money? Is the service you are receiving coinciding with the level of fees you are paying?
If you are searching for an honest, trustworthy second opinion from a fiduciary advisor, look no further. At Platt Wealth Management, we put our client’s needs first and provide completely transparent, fee-only services. Ready to transform your financial future? Give us a call at (619) 255-9554 to set up a complimentary review or email us here.