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Launching Your Financial Plan

01/26/01 12:09:46 PM PST
by Ralph Ujano Jr.

What should you look for when you're evaluating a financial service provider? Use these guidelines to separate the gold from the iron pyrite.

The concept of financial planning has become diluted as securities, insurance, and banking institutions attempt to reconfigure their products and themselves to fit a more client-centered approach. Many of these companies claim to offer comprehensive services; however, they offer piecemeal combinations of products and services, and the skills of their purveyors vary greatly. How, then, do you evaluate so many disparate claims?

Assess the financial service provider's commitment to helping you achieve your goals and objectives as defined by you -- not by what fits the provider's needs.

Evaluate the overall process used by the financial service provider in developing your financial game plan. The Certified Financial Planner Board, which regulates licensed certified financial planners (CFPS), has approved the following six-step process:

1 Establish and define the client-planner relationship
2 Gather client data, including goals
3 Analyze and evaluate the client's financial status4
4 Develop and present financial planning recommendations and/or alternatives
5 Implement the financial planning recommendations
6 Monitor the financial planning recommendations.

Take special note of step 4. Most financial service providers have a specific product to sell and may not tell you about other available products, even if they are a better fit for you. Put it this way: A Lexus dealer won't sell you a BMW. When considering a financial planning firm, make sure there is no hidden agenda.

Evaluate the scope of the financial service provider's services. A comprehensive financial game plan should generally include the following topics:

  • Economic freedom -- this is a plan to define and achieve financial independence (when you can work because you want to, not because you have to) using your current assets, liabilities, and cash flow, as well as future savings targets, projected investment returns, estimated taxes, and planned spending allocations
  • Risk management -- the best way for you to manage risk and support the successful implementation of your game plan into the future
  • Wealth management -- clarifies and confirms the time horizon you have to invest, the stages along your time horizon (accumulation, preservation, and distribution), your tolerance and preferences for risk, and the required investment returns in order to meet your objectives
  • Retirement plans -- the options available for using these important tax-deferred savings vehicles
  • Tax planning -- key areas where tax savings may be available, also ensuring that tax savings do not come at the cost of overall planning and performance
  • Estate planning -- a custom-tailored strategy that considers your values, goals, and objectives around money and ensures that your family and your assets are taken care of the way you want, now and in the future.

Review the credentials of financial service providers in relation to the services they offer. For comprehensive planning, a CFP license is a good basic credential. Designations indicating expanded expertise, such as attorney, certified public accountant, a master's degree in financial planning, chartered financial consultant (ChFC), or charted life underwriter (CLU), show additional depth in the provider's skills.

Make sure that the financial service provider has significant and direct experience in developing plans for individuals in your specific profession. Your chosen career path will create specific challenges throughout the various phases and elements of your plan, and your financial service provider should understand them.

Most important, examine how you feel after you leave your financial service provider's office. Do you understand everything that was discussed? Are you excited about your financial future? Do you have the peace of mind that comes from knowing where you are financially, where you are going, and how you will get there? Do you feel confident that your goals will be achieved?

A competent, professional financial planning firm integrates your professional, personal, and economic goals into a truly comprehensive financial game plan that accurately reflects your values and vision for the future. Your plan needs to be regularly updated to incorporate the professional, personal, economic, and government-legislated changes that occur each year. If your financial service provider does not deliver this level of service or falls short in one or all of these areas, you may want to consider choosing another provider to ensure you attain your investment plans.

Ralph Ujano Jr., CPA, CFP, MS, has more than 11 years of experience with Mercer Global Advisors (MGA), a financial planning firm that serves the needs of physicians throughout the country. Before joining MGA, he was a practicing CPA and FDIC bank examiner. Ujano can be contacted at Mercer Global Advisors, 11100 NE 8th Street, Suite 320, Bellevue, WA 98004. MGA's website is, or call toll-free at 888 642-4636.

Ralph Ujano Jr.

Mercer Global Advisors (MGA) has not added any product or service information to TRADERS' RESOURCE.
Title: CPA, CFP, MS
Company: Mercer Global Advisors (MGA)
Address: 11100 NE 8th Street, Suite 320
Bellevue, WA 98004
Phone # for sales: 888 642 4636

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