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Partners in Your Financial Planning

Partners in Your Financial Planning

Financial planning should be about you and not the planner and their products. I entered the investment advisory field for two reasons. First, is because I was sick and tired of financial planners telling people that they must have these huge sums of money saved in order to retire. Secondly, because I was tired of seeing planners design plans based upon the planners products and services rather than on the needs of the client.

A quick story. I was asked by a tax planning and compliance client to attend a meeting with a financial planner that he has known for years. The financial planning group was doing a presentation for he and his wife. The meeting was an overview of the firm’s planning process and some preliminary specifics for the client. I must say that the presentation was slick. Lots of nice flow charts, spread sheets, tables and graphs. The software was performing some nice calculations and what if scenarios (although the assumptions were manipulated to suit the planners’ objectives).

As the process was moving forward, the financial planning group members would cover certain areas of concern. Then we got to the retirement and savings area of the plan. I had seen this group do a presentation a number of years back and was hoping that their approach had changed. It had not. They spent the next fifteen to twenty minutes telling my client about the downfalls of qualified retirement plans (401K’s, IRA’s, 403B’s, etc.). Manipulated calculations were used to demonstrate the virtues of their alternative planning strategy to qualified plans, whole life insurance. A plan was being built around what the planners’ wanted to sell the client and not around the client’s needs and objectives. When asked what I thought, I did the best I could to just stay quiet.

At the end, I just told the client to ask the financial planner how much commission he was going to make if my client bought the insurance policy. Then I told him how much a planner would make if he invested in his 401K and profit sharing plan that was already set-up for him. I also told him that if this type of plan structure was the right for him and others, we would all recommend it because it is a money maker for the planner. However, it is almost never the right approach.

The point here is that the financial plan should be developed on the needs of the client. This is why people should really consider fee based financial planning services versus commissioned based planning. A fee based planner with an offset to the fees with commissions earned on investments made through the financial planner is the best of all worlds in my opinion.

If you are interested in fee based financial planning services please feel free to contact us at (615) 678-4751. Also, visit my other company’s website at