California Financial Advice & Consulting

The cornerstones of proper financial planning are

• Defining Capital
• Strategizing Capital Structure
• Generating/Determining optimal financial policies
• Maximum utilization of available finances

A simple 5 step procedure for comprehensive and effective financial planning would be

1. Evaluating current financial status of the individual
2. Determining the optimal financial goals
3. Segregation and evaluation of alternative action plans
4. Implementation of optimal financial action plan
5. Iteration and revision of active if required financial action plan

Are you a fiduciary?

This is possibly the most important question that you need an answer to. And the answer should be either a yes or a no, without beating around the bush. Ideally, you should only work with financial advisors who are fiduciaries. If the financial planner you are in touch with isn’t a true fiduciary advisor, then you need to ask detailed questions about why they are recommending a fund or investment. This is because when if your advisor is a broker, they would be incentivized to sell certain products which may or may not be the best first choice for you.

How and how much do you charge for your financial planning services?

You need to know how the financial advisor’s payment structure works. Ask them if they charge an initial planning fee or is it a percentage for assets under management, or they get a commission from selling you a specific product. Be candid about it and expect candid answers. This will help you determine if they have an incentive to sell you policies as well as how much they are going to charge you.

What credentials like licenses or other financial certifications do you hold?

There are distinct types of certified financial advisors and you need to know which of these the financial advisor you’re consulting is. The different types of certifications are certified financial planner (CFP), Chartered Financial Consultant (ChFC), registered investment advisor (RIA), certified public account (CPA) and personal financial specialist (PSF).

What are the services that your firm provides?

This is an obvious question but also something that a lot of people don’t ask. This question also helps you figure out what you cannot expect from your financial advisor. The best financial advisors have tax planning, insurance, estate planning and retirement planning.

Referrals

Your own personal network should be able to give you a few good suggestions because of how important financial advisory services have become to everyone.

Experience

You need to check how experienced your financial planner is and if they align with your financial assistance needs and requirements.

Types of fees (Transparency)

You need to clarify with your financial advisor about what fees they are going to charge you. This is important because there are several categories and types of fees out there like 12b(1) Fee, Surrender Charge, Back-End Fee, Wrap Fee, and Performance Compensation.

Retirement is a critical part of your life and you should do your best to be prepared for it. Having a competent financial planning firm backing you can do a lot of good for you in this phase.
These are the questions that you should be asking yourself before you retire:

• Do I have enough savings to retire?
• When is the right time to file social security and how do I do it?
• How do I decide on the best way to withdraw various retirement accounts to meet my requirements and last me as long as possible?

All these questions govern your lifestyle post retirement and they can be much easier to answer when you have a qualified, professional financial advisor by your side.

Verge of a family

If you are about to start a family – getting married or having kids – there are several unseen challenges that can rise which you would be able to set right with a financial planner. From new expenses that arise, to unifying finances, to getting life insurance, college planning and estate planning – it becomes a whole new ballgame! Professional financial planners will help you set things in the right order, so things will fall into place.

High earner or high net worth category

If you caught your big brake professionally and you are just overwhelmed by the financial decisions you’re facing, you’d do well to get the services of a financial advisor. They can guide you through pitfalls and get you to the best investment options for a secure financial future.

Specific financial requirements

You are in a situation that only people who are specialized with finance can help you out of. For example, you came across a windfall close to your retirement and now you’d like to reevaluate your retirement options in your best interests. This would definitely take a financial planner who’s versed with different retirement investment options as well as estate planning to give you a good option to invest in.

Brokers and Insurance Agents

Brokers or insurance agents may not be your best bet for actionable financial advice. They are motivated to just make a sale and may not have your best interests when recommending you a product.

Fee-Based Financial Advisors

Financial advisors who fall under this category usually tend to have a hybrid model of business. Which means they not just earn compensation from the fees paid by clients on recommended portfolios, they also receive discounts or commissions from the same products. This model of compensating with up-front sales loads also isn’t optimal for you.

Fee only Financial Advisors/Planners

Financial planners who operate under this model only earn compensation through client fees. They are registered advisors who are under fiduciary responsibility to deliver what is in the best interest of their clients. Which means they aren’t obligated to sell you a particular type of policy or product just for the sake of their own gain. Fee only financial advisors usually charge a percentage of the investments they manage or sometimes might even be hourly.

Registered Investment Advisors

Registered Investment Advisors are professional and independent advisors who are not affiliated with banks, brokerage houses or insurance companies. RIAs also offer the same level of professional financial services as do fee only financial advisors. As independent advisors they are legally bound to serve your interests and are held to the highest standard of care as fiduciaries. Fee only and Registered financial advisors are your best bet to a secured financial future.