Do you plan to travel in retirement or have a bucket list purchase you have always dreamed of? Perhaps you intend to spend more time with family or turn your passion into a business? Most importantly, do you have a unique plan specifically designed for ensuring you achieve those goals?
The path to and through retirement is a long and winding road of twists, turns, detours, and sometimes inclement weather. The CERTIFIED FINANCIAL PLANNER™ professionals at Pathfinder believe what sets themselves apart from industry peers by leading clients through a holistic financial planning process that ultimately provides a road map that will help clients navigate the road ahead and provide options if they run into the unexpected.
Practicing CFP® professionals go a step further than a typical investment focused advisor by addressing more comprehensive topics, abiding by the CFP Boards practice standards, and taking a fiduciary oath, committing to putting the client’s best interests above their own. Essentially, CFP® professional make sure there will be enough gas in the tank, all inspections have been passed, and the best way to travel has been examined rather than simply selecting the vehicle to drive. At Pathfinder, our planning process starts with client’s personal values, attitudes, beliefs, and behaviors as the foundation of their goals and helps shape personalized recommendations on topics which include investment management, retirement planning, estate planning and/or tax mitigation.
The Financial Planning Process
The planning process can be used to assess a single financial decision or to create a comprehensive plan encompassing all matters of someone’s financial life to successfully transition them to and through retirement. At Pathfinder, every CFP® professional is trained, tested, and monitored to ensure compliance with our comprehensive process and the national board. This promotes industry integrity and congruity within the planning process.
The 8 steps in our financial planning process, which align with the CFP Board, are as follows:
- Establish client-advisor relationship by agreeing on terms of service, process, and compensation
- Gathering essential financial data and documents, as well as values, preferences, and beliefs
- Analyzing financial information using the best software and years of experience
- Generating customized and specific recommendations for implementation
- Communicate and agree with the client on the action plan following our recommendations
- Present a financial plan deliverable with observations, recommendations, and actions
- Monitor financial plan and implementation timeline along with client (if client chooses to work with Pathfinder on an ongoing basis)
- Continue to stay abreast of industry regulations, changes, and best practices
Of the 8 steps in the financial planning process, the most important is for the client and advisor to gather the most accurate financial and intrapersonal information to build a comprehensive view of the client’s financial life. Accuracy of the information gathered is critical to generating and implementing appropriate recommendations. Gathering as much information upfront allows for efficient future planning decisions and assures the client feels that it is their plan and not just a software print out.
Upon completion of the initial planning process, the client receives a document reviewing the complete financial plan. A few of the items the deliverable includes are a financial position statement, net worth assessment, investment and risk management analyses, and retirement distribution planning. At this point, clients can clearly evaluate where they are currently, in relationship to where they want to be in retirement. This can be a reality check for clients who may realize they are not quite where they want to be; however, some may gain sense of relief that they know what to do to get on the path.
One of the most valuable takeaways that clients receive at the end of the process is a list of unique, time-bound implementation actions to increase the probability of reaching their goals. This is exciting for people transitioning to retirement, as they now have a road map to follow. This plan is a great reference as they begin their journey and it serves as the baseline for making future decisions as they manage and implement their plan. At Pathfinder Wealth Consulting, we simply help monitor progress and make adjusts so clients can relax and enjoy the journey.
The planning process establishes a baseline to monitor the plan over the client’s lifetime. If clients seek ongoing professional help from CFP® professionals to manage, implement, and monitor their plan, they will meet to review their goals, financial position, and strategies to evaluate whether the plan is moving the client towards their goals. Without any type of tracking system, the client would be unaware if their spending, saving, investment strategies, tax decisions, and risk management are supporting their goals.
John Lennon once said, “Life is what happens while you’re busy making other plans” and at Pathfinder we understand life does not always go exactly according to plan. In the world of finance, these unexpected events could include a reduction or loss of income, an increase in expenses, or a disability or death in the family. Having a financial plan in place will highlight the most optimum, necessary financial decisions to be made. Contingency planning within our process helps clients bring clarity and structure to what life throws at them.
Equally as important as the planning process is what separates CFP® professionals from many other industry advisors: fiduciary responsibility. The forefront of this responsibility is always having the client’s best interest in mind when making any recommendations, whether that is retirement income planning or investment proposals. In addition to this oath, CFP® professionals are required to follow 6 Codes of Ethics:
- Act with honesty, integrity, competence, and diligence
- Act in the client’s best interest
- Exercise due care
- Avoid or disclose and manage conflicts of interest
- Maintain the confidentiality and protect the privacy of client information and
- Act in the manner that reflects positively on the financial planning profession and CFP® certification
Many advisors make recommendations based off a client’s financial situation at the point-of-sale, likely based on commissions on those transactions. This is found often from insurance, annuity, and mutual fund salespeople that use the title of financial advisor. A CFP® professional is bound to take material facts into consideration, disclose their conflicts of interest that may appear to exist, and act in the best interest of the client. If someone is offering to complete a financial plan for you so that you will buy a product, that is not what we consider in your best interest. As fee-based investment advisor, as well as CFP® Professionals, our investment services also carry a fiduciary obligation, one that we are proud to fulfill.
Do you have a road map for your financial path ahead? At Pathfinder, we pride ourselves in working together with clients to ensure they reach the destination of financial independence. Your success is our passion.
We are here to guide you forward.