SBJ: You Don’t Just Need A Financial Adviser—You Need A Team

Industry Insight

BY: KENNY GOTT

No adviser knows everything about everything. That’s why you need a team to help plan and execute your financial trajectory throughout life. Be proactive about pulling together the right experts for your unique short- and long-term financial strategy.   

A planning professional—perhaps a CFP® professional, a Chartered Financial Consultant, or even your CPA tax professional—may take the role of “quarterback” on your team. They can help you take the broad view, starting with big-picture questions: for example, do you know if you’re saving enough for retirement? They should be able to produce an in-depth analysis of your current and planned savings, spending, and income sources, consider potential “bad-case” life scenarios, and plug in an investment growth rate that will make it all work. If that growth rate is unrealistically high, your planner may suggest saving more, seeking more income in retirement, adjusting your retirement budget, or a combination of tactics.

From there, your investment adviser (who may or may not be the same person) can recommend an investment mix aimed at the “correct” growth rate determined by your financial analysis. They may also review options for generating investment income. Your investment adviser should coordinate with your planning professional to find balance between your needed growth, additional growth you may want to seek for “stretch” or legacy goals, and of course your risk tolerance.

Your planner and investment professional should also be able and willing to work with your tax adviser to help you try to keep more of what’s yours. For example, if you’re planning a real estate purchase partially funded by an investment sale, your team may recommend spreading your capital gains tax hit across two tax years by harvesting half at the end of one year, and the rest after the first of the next year.

Your investment adviser should also know how to tax-manage your investments in other ways, for example they may recommend tax-appropriate investment products for your situation, and direct a sensible sequence of monthly withdrawals from tax-advantaged accounts vs. taxable accounts…and coordinate with your financial planner and your tax professional for a better outcome.

Meanwhile, your lead planner may have identified a potential future cash flow gap when analyzing the bad-case scenario of the premature death of a spouse. If life insurance would solve that shortage, your planner may work with a life insurance agent to shop the right amount, length, and cost structure for your budget. You certainly don’t want to be under-insured, or over-insured, and your advisory team should be able to help you dial that in.

From there it’s easy to see the web of advisory connections extending to business overhead and disability insurance, property and casualty, health, and long-term care insurance, and other areas of exposure that may be managed with risk avoidance and/or risk reduction, or insurance products where appropriate.

Your financial planner should also ask whether you’ve covered some common legal bases, for example and may refer you to an estate planning attorney. Among many other critical planning items, your attorney may discuss whether you need a trust to own your assets, and may direct your investment adviser on the proper structure for your asset titling and beneficiary designations—including for your business—to help fulfill your planning goals and avoid probate.

Again, some team members may be able to cover more than one area. Some financial planners, even some CPA tax professionals, are securities licensed to help with your investments, or may be insurance licensed, or both.

Finding professionals who know their stuff, and are compatible with your communication style and particular needs, may require some serious legwork.

Most professionals will gladly offer a complimentary consultation so you can make sure they’re a good fit for you. A side benefit of talking to multiple candidates is that you’ll likely get some free advice along the way…and maybe some much-needed clarity. Maybe you don’t even know right now what question to ask—you just know you need a plan, and you need professional guidance, as we all do. A good adviser should be able to help you think through problems and ask the right questions—always the first step to getting the right answers.

CERTIFIED FINANCIAL PLANNER^TM professional Kenny Gott is President at Piatchek & Associates and author of the book "Bottom Line Financial Planning". He can be reached at kgott@pfinancial.com.