Financial Planning: Frequently Asked Questions
- What is financial planning?
- Why do I need a financial planner?
- When is the right time to engage the services of a financial planner?
- Why is it important for a financial planner to have the CERTIFIED FINANCIAL PLANNER™ designation?
- How is Sigman Financial Fitness® different from most financial planners?
What is financial planning?
Textbook definition: Meeting life goals through proper financial management. The process involves several steps including: establishing financial goals, gathering the relevant client data, analyzing the data, developing a plan for achieving the goals, and then implementing and monitoring the plan over time.
Sigman Financial Fitness® definition: Financial planning is really life planning! Few people go on a vacation without having a specific destination in mind. By contrast, millions of people make significant financial decisions without having a financial goal in mind.
Lauren believes that good financial planning goes well beyond following a step-by-step process engineered to achieve a desired outcome. The reality is that we live in an uncertain world, and our lives change often and sometimes unexpectedly. Our loved ones count on us to make good financial decisions consistently over time so we can realize our hopes and dreams for the future. How do we know we're reading the signs along the road correctly?
The answer is to partner with a knowledgeable financial advisor in the life-long journey of achieving and maintaining financial independence. That said, being "knowledgeable" isn't enough; you also need a highly interactive relationship with your financial planner. If you don't see yourself enjoying a nice dinner with your advisor, then he/she may not be the right fit for you. Remember that a personal relationship with your planner, laid on a foundation of comfort and trust, is an essential element in a successful and satisfying outcome for you and your family.
Why do I need a financial planner?
Let's use the familiar analogy of physical fitness. Nearly everyone knows, (or at least thinks they know), how to work out: lift weights, run and stretch. Most of us try to maintain some sort of fitness regimen to stay in shape.
Inevitably, the process stalls, prompting us to wonder why we can't seem to get beyond a certain level of well-being. It's frustrating because we honestly believe we're working hard to make significant improvements in our day-to-day lives to enhance our health.
A very similar impasse commonly occurs in the financial planning process. We'd like to think we're making the best choices to be financially fit, but in reality, we've most likely reached a plateau where we have done all we can – but unfortunately it's not enough. To keep things moving in a positive direction, we need to find someone to be our partner to coach us to make the right decisions at the right time.
An experienced financial planner has seen many of the same client scenarios play out over and over again with similar outcomes. These valuable insights can be used to save significant time and money. Working with a professional planner also reduces much of the speculation about what works and what doesn't work in a given situation.
When is the right time to engage the services of a financial planner?
Time is our friend. The more of it we can commit to planning for the future, the greater the probability of achieving our goals. Typical life scenarios that bring clients to Sigman Financial Fitness® are:
- The Ahh Hah Moment: You realize that your financial position needs to be improved but you're not sure where to start.
- Too Many Choices, Not Enough Time: You accept that there are simply not enough hours in a day to evaluate thousands of financial products and services, an increasingly complex decision making process.
- The Wake Up Call: You experience a major life event such as kids entering college, loss of job, marriage, divorce, a windfall inheritance or death of a family member.
Why is it important for a financial planner to have the CERTIFIED FINANCIAL PLANNER™ designation?
The Certified Financial Planner™ designation conveys legitimacy, credibility, knowledge of the industry and commitment to continuing education. A Certified Financial Planner™ practitioner candidate works hard to earn this distinction -- the 2 day test is grueling, and over half do not pass on the first attempt. The CFP® certification qualifies planners to counsel clients in the areas of insurance planning and risk management, employee benefits, investment planning, income tax planning, retirement planning and estate planning.
How is Sigman Financial Fitness® different from most financial planners?
Refreshing. Lauren practices a no-nonsense, straight talk approach combined with compassion and understanding about possible past mistakes you may have made. There is no minimum dollar investment requirement to become a client at Sigman Financial Fitness®; you only need a desire to work hard and get things back on track.
Independent. One stop shopping for all your financial needs may be a worthy goal. However, no single company can provide everything a client requires. For example, you may shop at Safeway, King Soopers, Vitamin Cottage or Whole Foods for your groceries, depending on your particular needs. Similarly, we act as your "personal shopper" to choose the appropriate products and services from a variety of sources that fits YOUR needs.
Sigman Financial Fitness® is not solely affiliated with a broker/dealer (i.e. Smith Barney, Morgan Stanley, Merrill Lynch, Charles Schwab) or insurance company (AXA Advisors/Equitable, Northwestern Mutual). This independent stance allows Lauren to choose products or services from a wide variety of providers.
Unique. Our methodology is multi-disciplinary. As appropriate, we lead a team of subject matter professionals (legal, tax, accounting, insurance). Unlike other planning services, we do not emphasize the need for a formal written plan. Often, by the time such a document is finished, the plan and the world around us have changed, rendering the written plan obsolete.
Instead, our approach is about coming up with a more fluid action plan, broken down into manageable pieces. You set the pace for establishing priorities and only move to the next stage of implementation when you feel comfortable and ready.
Multi-faceted. Lauren brings a unique skill set to financial planning. A stint as an investment banker on Wall Street, her Harvard MBA, and her service as the financial advisor to a Forbes 400 level real estate developer, combined with extensive experience in family law and real estate finance distinguish her from most of her CFP® colleagues.
