Along with Breast Cancer Awareness month, October is Financial Planning month, a time to focus on the importance of personal finance management. Financial Planning month is observed nationwide during October. With the holiday season coming up (aka hefty gifting expenses) and the new year just around the corner, this time of year is a great opportunity to get your finances and budgets in order, not only to prepare for the upcoming months, but the remainder of your life.
Financial planning as a concept has been around for a long time, but not as we know it today. When the first graduating class of the College of Financial Planning graduated in 1973, financial planning was very different. It was centered around selling limited partnerships which came to end with the Tax Reform Act of 1986. However, financial planning re-emerged, giving new meaning to financial planning, this time with a focus on who the client is and what their needs are. Today, financial planning, as we know it, includes investing, tax planning, retirement planning, or mindful ways to help secure your financial future. The different areas of financial planning might interest your current situation or not. Talking with the right professional could help indulge your financial situation into the place you would like to see it go.
So, how do you find that right professional and what is a “Financial Planner?” Many people or professionals may deem themselves as a financial planner, professional, or advisor. However, it’s important to understand and look for the credentials that give them the right to label themselves as so. What exactly should you be looking for? The CERTIFIED FINANCIAL PLANNER™ professional certification is a good place to start.
CFP Board, formerly known as International Board of Standards and Practices for Certified Financial Planners, Inc. (IBCFP), is a 501(c)(3) organization that owns the CFP® and CERTIFIED FINANCIAL PLANNER™ professional marks. “CFP Board was founded in 1985 to serve the public interest by promoting the value of professional competent and ethical financial planning services, as represented by those who have attained CFP® certification.” Those aspiring to become certified must obtain a bachelor’s degree (or higher), complete a comprehensive financial planning curriculum approved by the CFP Board, and then pass a comprehensive 6-hour CFP® Certification Examination that tests their ability to apply financial planning knowledge in an integrated format. In addition, CFP® professionals must complete thousands of hours of professional experience related to the financial planning process prior to earning the right to use the CFP® certification marks. As a final step to certification, individuals must satisfy CFP Board’s Fitness Standards and commit to the CFP Board to abide by professional standards, known as CFP Board’s Code of Ethics and Standards of Conduct, which sets forth their ethical responsibilities to the public, clients, and employers, including the obligation to in the client’s best interests at all times when providing financial advice to a client. CFP Board also routinely performs background checks of candidates for CFP® certification and CFP® professionals to disclose various matters, including, among other things, criminal history, bankruptcies and liens, and regulatory or civil proceedings. Once certified, CFPr professionals are required to complete continuing education coursework, including a CFP Board approved ethics course each year to further their competence in financial planning.
Whew. Seems like a lot of work right? The CFP® mark is simple way to understand that the financial planner you are considering working with or currently working with, is an experienced professional with a prestigious certification in the financial planning arena that obtains the ability to oversee your finances. I mean, would you let someone that claims to be a doctor and does not have a medical degree operate on you during surgery?
According to the CFP Board, more than 97,000 professionals in the U.S. currently hold CFP® certification. However, the closest professional to your home address might not be the right one for you. As you probably would with any other type of professional you are about to hire, you should “shop around” and find the advisor that you align with. The person that would really get to know you and your current situation to find the best financial plan for you.
Find a CFP® professional here: https://www.letsmakeaplan.org
Now, let’s backtrack to financial planning. October is the perfect time to asses your financial situation, set goals, and create a plan for the future. Once you have set your goals, it’s important to have a plan in place to achieve them. They key is to stay focused and committed to your plan, even when faced with unexpected challenges or setbacks.
Financial planning, as defined by the CFP Board, is the process of meeting your life goals through the proper management of your finances. Lifetime goals can include buying a house, saving for an education or planning for retirement. Regardless of your specific goals or objectives these issues are appropriately addressed in a seven step process:
- Understanding the client’s personal & financial circumstances
- Identifying & selecting goals
- Analyzing the client’s current course of action & potential alternative course(s) of action
- Developing the financial planning recommendation(s)
- Presenting the financial planning recommendation(s)
- Implementing the financial planning recommendation(s)
- Monitoring progress & updating
Under this seven step process, financial planning addresses the following major categories:
- Education Funding
- Stock & Mutual Fund Research Analysis
- Life, Long-Term Care & Disability Insurance
- Investment Plan Review
- Retirement & Estate Planning
- Charitable Giving
- Succession Planning
- Trust Services
Remember, financial planning is an ongoing process. Regularly reviewing and adjusting your plan will help ensure that you stay on track and achieve your goals. Take advantage of financial planning month to get started on or update your journey to financial security and success.
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing materials are accurate or complete. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Gainspoletti Financial Services and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Raymond James and its advisors do not offer tax or legal advice. You should discuss these matters with the appropriate professional.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.