The financial industry can appear, to outsiders, as a kind of alphabet soup. There are the various acronyms to sift through — CPA, CFP®, etc — not to mention titles like “financial planner,” “investment representative” or “insurance advisor.” What does any of it actually mean?
Finding the right type of financial advice for you can be challenging. Not only are there a broad range of “professionals” out there to choose from (some of whom may not even be qualified), but they also offer an equally broad range of services. You may not even know which of those services you need, let alone which professional you want to provide them.
Two of the most commonly provided services, however, are financial planning and investment advisement. Which of these types of financial advisement will best suit your needs? Let’s find out together.
What Does a Financial Planner Do?
Here’s the thing: “financial planner” actually doesn’t mean too much in this industry. In fact, just about anybody can decide they’re a finance expert and set up shop — which means it’s buyer beware for the consumer.
One good way to hedge your bets is to look for a CFP® (CERTIFIED FINANCIAL PLANNER™). This is a designation that requires a rigorous course of study and requires the advisor to always act in the best interest of the client.
Once you do find a qualified professional, the specific services you can expect will vary based on that planner’s business model. But the general rule of thumb is this: financial planning is holistic, taking many aspects of your life into consideration.
In other words, a comprehensive plan is developed with your input, and this plan dictates a wide range of financial decisions — including your investment strategy.
A qualified financial planner can help walk you through an array of financial and finance-adjacent decisions, like budgeting, investing, social security maximization, planning for retirement, evaluating company benefits, developing debt pay-down strategies and reviewing your various insurance coverages.
And the way you pay for it is different, too; while investment advisors usually charge a percentage of your assets under management, or AUM, holistic planning services are generally offered for a fixed planning fee or a monthly retainer.
What Does an Investment Advisor Do?
Investment advising, on the other hand, is focused primarily on — you guessed it — your investments.
While you’ll be on your own to create your budget, select insurance, choose workplace benefits, and make daily decisions that impact your financial success, an investment advisor can help you with the heavy lifting when it comes to your portfolio.
Maybe you understand that you need to invest to meet your retirement goals, but have absolutely no idea how to create a well-balanced, diversified portfolio. Or maybe you simply don’t have the time to do the research necessary to make wise asset allocation choices.
Either way, hiring an investment advisor can be a great approach for those who value the expertise a professional can lend to their financial strategy.
How We Can Help You Reach Your Goals
At Mosaic, we are passionate about the holistic approach because we know it works. We’ve seen our clients’ overall success improve when financial decisions are made relative to the big picture — as opposed to the piecemeal approach of stand alone investment management.
After all, just as in physical health, all the parts of your financial wellness are connected. For example, if a client takes her Social Security benefit early, then she will need to invest differently than if she takes it later. One financial decision affects other financial decisions.
Our clients can look forward to a holistic approach, starting with goal definition and using careful analysis to help them make informed decisions. Here are just a few of the topics we cover with our planning clients:
- Cash Flow/Budgeting
- Asset Allocation/Portfolio Construction
- Estate Planning
- Retirement Income Planning
- Long Term Care Planning/Life Insurance/Disability Insurance
- Social Security Maximization/Pension Analysis
- Property and Casualty Insurance Review
- Benefits Review
- Medicare Planning
- Proactive Aging Planning
- Tax Planning
Along with creating a roadmap for financial success, we also help you implement, maintain and adjust your financial strategies over time — so don’t worry, you won’t be left to figure it all out on your own!
We generally meet with our clients on a quarterly basis, just to ensure everything is still running smoothly. And of course, we’re always available, in real time, when you encounter an unexpected challenge or opportunity.
If this type of planning approach seems like it may be a fit for you, reach out today to set up an introductory meeting so we can learn more about how to make your financial goals a reality.
