Planning for Wealth
"A lifetime of wealth management is not a do-it-yourself project despite all the suggestions to the contrary. A well-respected writer in the field estimated that maybe 1 in 10 people has the emotional fortitude, let alone the time, to succeed at do-it-yourself wealth management. I would suggest the actual number may be even lower, especially as the amount of dollars people are responsible for rises."
What do our Advisors Think About Financial Planning?
"Comprehensive financial planning as it is currently defined is the accumulation of data and the production of a elaborate and rather long, formal document usually presented in an attractive binder. It has more appearance than substance." As a CFP, Wayne believes in a financial-planning approach to client relationships and decision making: "All of us have limited capabilities to stay focused on complex personal financial-planning issues. Many of these issues are fraught with emotion, interpersonal family dilemmas, and real-world issues that affect the way we try to implement these plans. The advisor's responsibility is to keep the big picture in view and help the client make those pressing decisions in the context of lifelong financial-planning."
What do our experts believe are the five most important things a person needs to know when beginning the planning process?
1. You must manage your human relationship with the investment marketplace. Personal and family financial issues can be charged with emotions. You must understand that while you may not be able to change your feelings or emotions, you can manage your investment behavior.
2. You must come to an understanding about the role of the investment media. The real awakening comes for each individual investor when he or she understands that not only will this financial information not be particularly useful in creating successful investment strategies, the roar of the media is probably the greatest problem in maintaining emotional financial stability and a long-term focus.
3. Nothing will be more valuable or increase your chance of success more than a relationship with a trusted financial advisor.
4. Your investment strategy must be incorporated into a concept of long-term investing structured and monitored over a lifetime and, for many high-net-worth clients, directed toward the benefit of the next generation. Incorporating this view of the world will add tremendously to the quality of the relationship with your advisor, tone down the roar of the media, and help keep you from losing sleep.
5. You must develop an understanding of your risk tolerance and how it will be incorporated into your investment portfolio. This will give you the ability to balance risk and return more effectively in the portfolio, increasing return and financial peace of mind.
