We all accept the reality of transitions. Some of us fight them more than others but in the end, change is inevitable. Such is true of our transitions in life.
Ten years ago, I labored over our youngest learning to tie red sneakers; today, we are planning for college for three children and retirement is beginning to occupy more of our thought processes.
In the summer, there is a certain comfort in taking stock of our winter coats; what fits, what doesn’t; and going out to stock up on sweaters, coats and gloves in anticipation of the snow and cold.
We are prepared and there’s a security in knowing we are prepared. Less stress, fewer last-minute hassles, and you probably save money as your reward for doing all the heavy lifting in advance.
These are just parkas and mittens I am talking about here. Why then do so many of us stress, wait, worry and stress some more about finances? Why don’t we treat our life transitions the same way we treat putting away our shorts and flip flops and replacing them with flannel and boots?
OK, so maybe this is an over-simplification, but the principle is the same. The role of planning for transitions cannot be overstated.
I’ve had this conversation about planning with many people and my informal poll has found that often people don’t plan for one or more of several reasons: They don’t know how. They feel a bit helpless over what they see as limited resources or limited options. They don’t know where to turn. Or they fear they will make a bad choice and lose money. Or all of the above.
These are completely legitimate concerns and just about all of us have at least one of them. I have a few suggestions to make this process a bit easier.
First, do not assume that a bunch of letters after someone’s name actually mean anything. For example, there’s no such thing as a “Senior Wealth Planner” or a “Retirement Planning Specialist.” One phone call to the state’s Securities Division at 828-3421, or a Google search, can let you know if the letters mean something.
If you look for planners who are a CFP (Certified Financial Planner), ChFC (Chartered Financial Consultant, CFA (Chartered Financial Analyst), CPA and PFS (Certified Public Accountant and Personal Financial Specialist) — these are designations specific to overall planning. To earn one, you must pass exams, have several years of work experience, keep up with continuing education and adhere to ethics regulations.
It’s helpful to ask other professionals for names. You can also go on the CFP, CFA, of ChFC website and get names of people locally who have these designations. Try to get three names and then interview them.
You want someone with a good reputation and you want someone you feel a good rapport with. Please remember, this is the person who is helping you design your financial future. You want to feel good about this person.
Always remember to ask how your planner gets paid. Planners have families to feed and they do get paid. You want to know how. If they get paid by the plan, by the hour or if you purchase investment or insurance products, you want to know that.
I can’t say absolutely one way is “better” than another but you do want to know.
Be sure to know what you need help with, and be prepared to give the planner the information they need to help you. That’s where the trust factor comes in. In this business, there are few things more important than confidentiality.
If you do your homework first, your relationship with a planner can be a long and rewarding partnership that will give you ease of mind through the seasons of your life.
Karen Paul is a financial consultant in Burlington.MORE IN National / World Business
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