January 2019

A Doctor for Your Health, A Financial Planner for Your Wealth

Author: Pat Sokolowski

With the new year upon us, many people start thinking about their health and finances. The two are actually intertwined and very similar. A visit to a financial planner early in the year can set you up for a financially healthy 2019. As a CERTIFIED FINANCIAL PLANNER™, I get asked all the time, “What can a financial planner do for me?” I like to compare what a CFP® does for your finances to what your primary care doctor does for your health.

Establish a baseline
When a patient goes to a doctor for the first time, the doctor will make an assessment of that person’s physical and mental health. From head to toe, the doctor will do his or her best to understand the patient’s health. This allows the doctor to both make recommendations for improvements and spot when something is amiss.

A financial planner does the same analysis, but with your personal financial situation. The first step is to look at where you stand today. How much do you have saved? How much do you spend? What do you have for insurance coverage? How much do you pay in taxes? Do you have estate planning documents in place? What are your financial goals? This allows planners to understand your current situation before making recommendations and gives them something to measure against for future meetings to spot missteps or celebrate achievements. It’s helpful for both your health and your wealth to work with someone who understands where you started.

We have a test for that
Doctors run tests to establish your current health and to help diagnose the ailment when something is wrong. They run tests again to see if what they have recommended is helping. Financial planners run a series of tests as well. This is especially important while developing recommendations. Different tests, like Monte Carlo Analysis, for example, can be used to help understand the probability of success based on the planner’s recommendation and compare it to what the client is currently doing to meet his or her goals. The planner can then make changes to recommendations based on the test results.

The right dosage
All medicines have side effects, and doctors try to find the correct dosage that will improve the patient’s condition and minimize the side effects. Financial planners do so the same for their clients. A good planner finds a solution that allows the client to achieve his or her goals with the minimum amount of risk. Investing without planning is a fool’s errand; without identifying goals, timelines, and a projection of the cost of those goals, it is impossible to determine the amount of risk to take.

Referrals
It is common for your primary care doctor to refer you to a specialist when you need someone with more expertise for a specific area of your health. Financial planners do this as well when a planning need lies outside their area of expertise. For example, financial planners have a lot of estate planning knowledge and can identify gaps in an estate plan. However, writing a will or drafting a trust is a job for an attorney. Similarly, you may be referred to a CPA for complicated tax matters. Financial planners have a duty to refer you to someone who can best service your needs.

An ongoing relationship
When you are sick and need to see a doctor, the care and service you receive from your primary physician is likely superior and less stressful than a trip to the emergency room or an urgent care facility. Your primary care doctor already knows you and your health; you have a relationship, and they have seen you while you are healthy. Likewise, the delivery of a financial plan is not the end of your relationship with a financial planner. You can return as often as needed, and when you do, the planner will already know where you started and what you have been doing. In times of an urgent question or problem, it’s important that you already have someone you know and trust. A CFP can be invaluable when there is the death of a spouse, a divorce or any number of life-changing events.

Having a relationship with someone who is working in your best financial interest is just as important as having someone you can go to about your health. A CERTIFIED FINANCIAL PLANNER can be your partner to improve your wealth. Take the time this year to get a financial plan; your future self will undoubtedly thank you.

Pat Sokolowski is a CERTIFIED FINANCIAL PLANNER with WestView Investment Advisors, located at 1 Corpus Christi Place, Suite 106, Hilton Head Island. For more information, call (843) 243-6088 or visit online at www.westviewhhi.com.

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