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We are a team of fee-based CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals committed to transparency and the fiduciary standard of care. Our relationship-based, comprehensive approach to wealth management and financial planning is designed to create and conserve wealth while providing our clients with financial peace of mind and an increased quality of life.

Do I Need a Financial Planner?

Blog | Citrine Capital

Anyone searching for investment advice is undoubtedly confronted with many choices of service providers operating under titles such as certified financial planner, financial consultant, registered investment advisor, stockbroker, and insurance agent.

Do I Need a Financial Planner?

Ryan Cole

Working with a high-quality financial planner isn’t cheap, which probably has you wondering whether it’s really worth the cost. Furthermore, you probably didn’t need a financial planner in your 20s, as your finances were simple back then, so maybe the DIY approach can last a little longer.

But let’s face it, as we change jobs, get married, have children, purchase homes, and get promotions our free time becomes limited and our financial lives increase in complexity, and this added complexity will most likely cause you to question your current financial picture. For example, could you be saving more on taxes? Who will take care of your family if something happens to you and/or your spouse, and will there be enough assets available to care for them? Will you have enough money if markets take a dive? Should you currently be invested in the markets?

These questions can feel overwhelming. But there are ways to ease the anxiety, and a financial planner might be the best answer. Below are just a few ways that a good financial planner will prove their worth many times over by saving you time, simplifying your life, protecting your assets and growing your net worth.

1.     Tax Planning – Are you taking advantage of all your available tax deductions and credits? Should you be contributing more to tax-advantaged accounts? Do you have highly concentrated stock options or positions with severe tax consequences? A financial planner will help you answer these kinds of questions and guide you through comprehensive tax planning, which can quickly add up to thousands of dollars in savings per year.

2.     Investment Access, Expertise and Planning – A financial planner does a whole lot of things behind the scenes that you probably don’t have the time, expertise, desire or patience to deal with. A few of these value adds include selecting investments that are aligned with your goals, values and risk tolerance, rebalancing your portfolio to ensure it remains in line with original objectives, and tax loss harvesting to save you more on your tax bill.

Most financial planner also have access to investment vehicles that aren’t available to the general public. These range from highly touted mutual funds (such as Dimensional Fund Advisors) to private equity and venture capital investment options that may be appropriate for the right investors. In addition, most planners also receive substantial discounts on the same investments that are used by the general public, and there is a direct correlation between saving on fees and higher investment returns.

3.     Risk Management and Company Benefits Planning – Financial planners often find ways to put more away into company retirement plans than clients realize is possible (again, directly resulting in tax savings). Furthermore, they make sure that you’re taking advantage of all the benefits and insurance coverages available through your company.

A planner will carefully examine your coverage and policies including your homeowner’s/renter’s coverage, life and disability insurance, and auto coverage. S/he can then alert you to any gaps in your coverage and/or let you know if you’re over-insured and paying too much. If you already have accumulated wealth and are underinsured, you could be at risk. Wouldn’t you sleep better knowing your insurance ducks are in a row?

4.     Estate Planning – Do you want a random judge deciding where your assets go when you pass away, or more importantly, who takes care of your children? If not, you need a will and possibly even a trust to assure your assets and guardianship of your children go where you want them to go and when. If you’ve started a family and have accumulated wealth then this is critical.

Furthermore, if you begin estate planning in your 30s, you could save big time later in life. Ultimately, a much larger percentage of your assets can be passed to your loved ones and charities of choice. If you wait too long to begin this process, it usually means more of your assets end up going to good old Uncle Sam.

5.     Expertise and Professional Networks  – Most of us don’t want to ditch our family and friends on nights and weekends to research tax savings strategies, rebalance our portfolios, study insurance coverage and read our company benefit booklets. Furthermore, you probably don’t have the motivation, expertise or professional networks to research, construct and implement a comprehensive financial plan. Financial planners have years of expertise in dealing with these issues. Moreover, they have close relationships to accountants, attorneys and various other professionals who can better assist in these areas.

6.     Plan Implementation – What does your financial picture currently look like? How well have you done on your finances up to this point? A financial planner will coach and encourage you to consistently make wise financial decisions. S/he will also help implement most of your financial plan for you while guiding you through the rest. Ultimately, financial planners ensure that action is ultimately taken and your plan gets implemented. This proves to be the greatest value added for many folks who work with financial advisors, since navigating the world of investments, insurance, estate planning, etc. alone is overwhelming.

Finding the right financial advisor can be a lot of work. But if you’re feeling overwhelmed by your finances or simply want to free up time for the other things that matter in life, it’s time to start looking for a financial planner. And it’s worth building a relationship with an financial planner early on as your financial picture will most likely continue to increase in complexity over time.

So yes, you really need a financial planner. S/he can save you thousands, possibly even millions, over your lifetime, and more importantly bring you peace of mind. The end result is that you should be able to retire more comfortably (and probably sooner), spend more time with friends and family, and reduce financial stress and frustration. What’s not to like?

Ryan Sterling Cole is a Personal Financial Planner at Citrine Capital. He founded Citrine Capital to help Gen X and Gen Y professionals make prudent financial decisions for themselves and those who depend on them. Ryan is a Certified Financial Planner™ Professional.

Sources

“The Kitces Report” by Michael Kitces, Volume 3, 2015

“Quantifying Vanguard Advisor's Alpha" by Kinniry, Jaconetti, DiJoseph, & Zilbering, 2014

"Alpha, Beta, and Now... Gamma" by Blanchett & Kaplan, 2013

"Capital Sigma: The Advisor Advantage" by Envestnet Quantitative Research Group, 2015