Category: Goals and Dreams

What is a financial planning relationship and how can you as the client best show up for it?

When you hire a financial planner, what is it you’re really signing up for?

In part the answer to that question depends on what type of planner you’ve decided to hire. If they manage your assets, that will define the relationship a little differently than if you hire an advice-only planner. How they get paid may also define the terms of your relationship and how often you engage. As you decide on the type of financial services you’re looking for, I would encourage you to first consider what you’d like the relationship to look like because YOU get to decide what works best for you. Then, you can use this information to help guide your interviewing process and select the planner that best matches your desired way of engaging. Not all planners will engage the same way, just as not all potential clients will seek the same type of engagement – and that is ok! There’s no one right way to do financial planning. Finding the planner that best fits you is what matters.

I am going to approach this article from the perspective of advice-only financial planning since that’s the type of planning I do at Find Your FI. In all reality you could use this as a template for your relationship with any advisor. Where it differs significantly I’ll do my best to point that out.

First, a quick review of what advice-only planning is and isn’t. The premise behind advice-only planning is that you pay your financial planner directly for the advice they provide you, as agreed upon in a written financial planning agreement. And as the name suggests, there is no management or discretion of financial assets – you are paying for advice and only advice. This type of planner will not have access to your account in any way – they will not place trades or actively monitor performance. Some advice-only planners do offer ongoing service to help you implement your plan and guide you through learning how to open accounts, roll assets over to new accounts, and teach you how to rebalance your account if needed. Other advice-only planners like myself will incorporate mindset and accountability coaching into their ongoing offerings.

The services that advice-only planners offer can range from hourly to a longer-term engagement. There are some fundamental building blocks you can bring to the table in any relationship. These include the following:

Clarity of purpose: What’s the question you’re trying to answer by engaging in the financial planning process
Teamwork: Financial planning is a team sport. You’re the expert in your life and the planner you hire is the expert in personal finance. You’ll both need to bring important components to the playing field to get the best outcome possible.
Stay engaged: Try your best to be fully present in the meetings. Limit distractions so that your attention is fully on the task at hand! This is a process designed to benefit you and pursuing that which matters most to you, so it’s worth your undivided attention in these moments! Ask questions, take notes – this process can reach its full potential when you choose to show up as best you can!

Now, let’s review how you might best show up in each of these engagements:

Hourly:

This one is pretty straightforward. You’re paying a planner by the hour to get a few questions answered. This arrangement is the most limited in scope with minimal if any longer-term relational considerations. However, knowing how to engage even in a limited amount of time can really help you get the most out of the interaction!

The best use of your time, energy and attention in this are arrangement may look like this:

Clarity: Be as clear with yourself as you can on the questions you have before you engage the planner. That includes getting clear on what you know and don’t know! Write your questions down; that process plus reflecting on them can help create clarity. If you don’t feel super clear, be transparent about that! You can say something like “I have some questions on my 401(k) but I’m not exactly sure how to ask them”. Or, “I don’t fully understand my 401(k) but I’d like to learn more about it and how to best utilize it”.
Teamwork: Provide the planner the information they ask for in as timely a manner as possible. They can only work with the information they have and they need your help to do it! Remember – planning is a team sport!
Stay Engaged: When you show up for the meeting, be ready to take notes. You’re paying by the hour so make the most of the time you choose to pay for.

This type of planning tends to be best for people who:

Have specific questions in one or two areas. Example: How should I invest my 401k? Can I afford to buy a house?
Aren’t yet in a position to afford more comprehensive planning but are ready to get started taking control of their finances
Are DIYers. They can take the information provided by their planner and implement it independently.

One-Time Plan:

If you choose a one-time plan, the engagement will be of a limited nature. Beyond the set meeting structure established at the outset, there may not be a ton of space for additional interactions, keeping this relationship more limited in scope, though more in depth than hourly planning.

The best use of your time, energy and attention in this are arrangement may look like this:

Clarity: This is true for all planning engagements! The more clear you can be with yourself on what you’re looking for from the financial planning process, the better.
Teamwork: Provide the information your planner requests to the best of your ability. You can expect some type of “data gathering checklist” to help guide the collection of documents needed to build your plan. Giving them this info in a timely manner is tremendously helpful! If an item they requested doesn’t apply to you, just let them know! And if you’re having a tough time finding something, let them know that too! They’ll likely be more than happy to help you locate it. If there’s something you think is valuable for your planner to know, but you don’t see it on their checklist or it hasn’t yet come up in conversation, feel free to provide it. The more transparent you are with your planner, the better they can help you assess your situation and provide the guidance you’re hoping for. I know it can be uncomfortable to share such personal information with someone who is likely a perfect stranger. But assuming you’ve done your research about their qualifications and had a positive intro call – there’s a reason you hired them! And part of that reason likely has a lot to do with trust.

Stay Engaged: Be an active listener and take lots of notes! Most planners provide some sort of follow up note after a meeting so you’ll also have that information to reflect on after the call – but your own notes help keep you focused and engaged. And don’t forget to Ask questions! If you don’t understand something it’s ok to ask.

This type of planning tends to be best for people who:

Have specific questions in MORE THAN one or two areas. Example: How should I invest my 401k and how much should I contribute each year? If I contribute more to my investments, can I afford to buy a house? How will those decisions impact my choices.
Are able to afford a comprehensive plan and understand the value of learning how the various components of personal finance interact with one another across time.
Are hybrid-DIYers. They want some help in learning about personal finance and can take the information provided by their planner and implement it independently.

Ongoing or longer term engagements:

Longer-term engagements provide the most space for a professional relationship to grow into a valuable and trusted partnership. These relationships are where it really makes sense to focus on how to best show up and make use of this resource!

The best use of your time, energy and attention in this are arrangement may look like this:

Clarity: Be open and honest with yourself and your planner about what you need. If you can’t be, pause and ask yourself why: you either picked a planner that isn’t the right fit for you, or you may need to do some self reflection around why it’s challenging to do so. You don’t need to share your deepest darkest secrets here, but without some mutual respect and trust you ultimately won’t walk away feeling satisfied with your plan or the experience.
Teamwork: If you’re working with me that’s how we’ll practice financial planning. I want to co-create this plan with you in a way that honors your objectives. Working together with mutual respect, open lines of communication, clarity and grace will do wonders!
Stay Engaged: Provide the information your planner requests in a timely manner. It helps them create the best plan for you! If you’re stuck and can’t find something – ask for help. If you need a little more time, say that too. Life happens and sometimes we need some extra time – that’s different than kicking the can down the road indefinitely though. If at a certain point you don’t provide your documents to the planner, it may be time to check in with yourself on whether or not this is the right time for you to engage in this process.
Slow Down. Here’s where I think the beauty of true financial planning starts to shine through. In an ongoing relationship you have the advantage of time and space on your side. Notice if it’s time to pause before a choice or purchase and check in with your planner. Your planner will be more familiar with your goals over time, and as such is in a unique position to coach you through various financial decisions. And remember – these decisions don’t just need to be about the stock market! In fact, most won’t be.

Done right, ongoing advice-only financial planning is like preventative medical care and not like emergency medicine.

This type of planning tends to be best for people who:

Understand that financial planning at its best is a dynamic process across the lifetime; a one-time plan can only take you so far.
Are in a position to afford the ongoing fees
Are hybrid-DIYers. They appreciate the educational and coaching aspects of an ongoing relationship and can also take the information provided by their planner and implement it independently.

If you’re thinking about a financial choice – or any choice that MAY have a financial component, reach out to this trusted advisor you’ve hired! That’s what they’re there for. Thinking of buying a house? A car? Maybe it’s even just some new furniture, a vacation, or any purchase that feels significant to you and your overall plan. Talk to your planner. A good planner will listen to you with deep empathy and respect. They will ask good questions. They’ll respect your autonomy. And they’ll give you their professional thoughts on whatever the thing is you brought to them.

So before you make a financial decision that you think could significantly impact your plan … even when (and perhaps especially if) it doesn’t have anything to do with the stock market … drop your planner a note, give them a call, take a few minutes to run it past them. I’m not suggesting you call your planner every time you buy a cup of coffee or buy new running shoes. That’s not a good use of anyone’s time!

But choices that could hold significant mid- to long-term outcomes for your plan are worth a brief pause and check in with the person you’ve entrusted to be your sounding board and provide trusted advice. You always get the final say in what you do with your money .. but if you’ve decided to enter into a paid agreement with a planner, use that relationship as it’s intended!

If that sounds like the type of relationship you’re looking for with a financial planner, be sure to ask them questions in the prospect call about their process. If it’s too limited in scope for you or you don’t feel comfortable sharing with them from the outset, it’s probably not a good fit. Keep looking until you find the fit that’s good enough for you!

Financial Planning: More Than Investments

How can I best use my financial planning relationship?

Consider what your goal is (or was) in hiring a planner. If it’s only for investment related decisions you’re best off hiring an investment advisor and not a financial planner.

If you want a more holistic view of your finances, look for a financial planner. But know that in doing so, investments will NOT be the main focus of your work.

Investments are not the only realm of planning.

For too long our society has equated financial advice with investments and the performance of those investments. And while investing is a critical key to building wealth, it is just one piece of the pie.

A real financial planner knows this and can have conversations with you around many aspects of money … and how it shows up in your life.

Here’s what I’m getting at: just because a financial decision you’re considering isn’t directly related to the stock market doesn’t mean it’s not a financial planning question!

On the contrary, most of the financial choices we face across our lifetime DO NOT involve the stock market. And … these are some of the most critical choices we must make:

Should we leave our job or take a new job?
How much do we really need to make?
Do I have the right insurance coverage so that when the unexpected happens I won’t be financially ruined?
How much should I pay for my kids’ education?
Why don’t I know where my money is going every month?
Could I be saving a little more on taxes?
Is a will or a trust better for me?
Do I need a Roth IRA or a traditional IRA?
How much should I have saved in an Emergency Fund?
Can I afford to buy this house?

All important questions.

Build a long-term relationship with your financial planner so that you can ask them as they come up! Don’t be afraid to lean into this professional relationship as one of your resources.

But wait … there’s one more seed I want to plant for you that just might be relevant to this whole business of financial planning …

Would you pause for just a second and let what I’m about to say sink in?

Those questions I just listed above? Those aren’t the real questions.

The real questions are resting deeper in our soul.

And sometimes, we can’t find the words to ask them.

If we could, they may sound more like this ….

Am I safe?
Is my family safe?
Am I accepted?
Do I belong?
Can I be happy?
Will my kids be safe and happy when I’m gone?
Is it ok to have hopes and dreams?
What if those hopes and dreams don’t involve a job or a lifestyle I don’t really want?
Am I loved?
Am I free to choose?

Your planner can’t answer those questions for you. No one but you can truly answer those questions. Sometimes the answers to these questions unfold slowly across time as we work on our own clarity.

And sometimes money plays a role in partially addressing those most human of longings. Part of building our wisdom is knowing what money can and cannot do for us on this journey. Don’t give money a job it can’t do.

My hope for you is that you have a planner in your life that can see and hear the real questions, especially when you don’t have the words to express them.

What kind of a DIYer are you?

In the advice-only financial planning sphere we often use the term “DIYers” to describe those clients who have a certain comfort level with their finances. These people often don’t feel it’s necessary to hire a financial professional for a robust menu of services. In particular the distinguishing factor between DIYers and those that prefer a hands-off approach to their finances is the financial zone of investments.

DIYers are likely more comfortable opening investment accounts, depositing money, buying their chosen securities and monitoring the performance of their investments. Those with a hands-off approach prefer not to do any of this and seek out investment advisors to do it for them. Neither are right or wrong, good or bad. It’s just a preference. Knowing your preferences can go a long way in helping you select the right financial professional to hire (if you want one at all)!.

On a scale from 1-10, imagine 1 being “not at all – I’d rather hire someone to manage my investments and monitor my overall plan” and 10 being “complete DIYer – I feel completely comfortable managing my own investments and creating and updating a plan as necessary”.

If you’re a 1 or a 10, you’re probably not reading this blog anyway. So, let’s explore what the other numbers might mean for you. Most people fall somewhere in the gray zone of this scale. This isn’t an exact science, rather a framework to help you think through how you’d like to approach your personal finances and what type, if any, of a financial professional would be best for you.

Mid-Way on the scale: The 5 marks the start of the hybrid-DIYer zone

Let’s start with the number 5. This mid-point gives us an anchor point to understand the zones both above and below it. I see 5 as the beginning of the range 6 thru 9 that describes someone who is a hybrid-DIYer, and the end of the 2-4 zone that describes the “aspiring DIYer”. At a 5 this person feels comfortable enough to be guided through their finances and understand financial speak “just enough” to feel confident in their abilities to grow. Where they don’t feel comfortable, they are first able to acknowledge that and decide they want the advice of a financial professional who is willing to teach, guide and coach them to increase confidence and competence.

As you progress from 6 thru 9 you are increasingly confident and competent in your abilities to manage your finances, investments and otherwise. Folks in this zone (5-9) who hire a financial planner often fit best with an advice-only planner. But so do the people in the zone of 4-5 … and often they are the silent middle who get overlooked! You don’t need a ton of assets, financial know-how or time on your side to deserve quality financial advice. You just need the desire to learn and move forward.

Now that we have a mid-point anchor, let’s step back to the beginning of the scale let’s explore the range of 2-4 on our scale of 1-10.

If you fall in the range of 2 – 4 you may be in the zone of “Aspiring Hybrid-DIYer” … you are learning more about personal finance so that you can become a hybrid DIYer.

These phrases/questions might fit for you:

I don’t yet have a lot of assets, and I feel a little (or more than a little) embarrassed about my finances – is there anyone who will start from this point?
I’m not sure where to start with personal finance, but I’m curious to learn more
I could probably use some guidance, but I wouldn’t know who to ask for help.
How would I begin to think about an investment philosophy?
I’ve asked for help from financial advisors who charge based on assets under management (AUM) but I don’t reach their minimums so I couldn’t gain access to the advice I know I need.
I’ve read enough and listened to enough podcasts to know that:
- Given enough guidance and coaching, I could manage finances on my own. I just need a starting point!
- I don’t want to go this alone – someone please help guide and teach me!
- There’s so much to learn – who can show me what to focus on?
- I don’t have the time to learn this on my own – I want a guide.

To be successful in working with a financial planner in this zone you will be willing and able to …

Dedicate the time necessary to learn the basics of personal finance
Pay for the services that will help you build the muscles of discipline and know-how to reach our goals
Move outside your comfort zone, even if just a little bit, to learn something new about money and yourself!
Be patient with yourself (and your family) as you try some new things

Finally, let’s explore the range of 6-9 on our scale of 1-10.

If you fall in the range of 6-9 you may be fully in the zone of “Hybrid DIYer” … of tightening up your personal finance philosophy by gaining the opinion of an advice-only financial planner on your plan. You’re open to suggestions and would feel better knowing you’ve had an objective opinion.

These phrases might fit for you:

I know quite a bit about my finances, but I would still really appreciate the support, guidance and coaching of an advice-only planner
I’ve spent quite a bit of time learning about personal finance and feel pretty confident in my abilities to select the basic ETFs or Mutual Funds that comprise my portfolio.
I don’t invest in anything complicated. I understand that investing is for the long-term and my philosophy is to buy and hold in index funds
I’m curious to know what alternative courses of action a financial professional might advise for me – am I missing anything?
I am confident in my abilities and I want a dedicated coach and thinking partner along my financial journey

To be successful in working with a financial planner in this zone you will be willing and able to …

Dedicate the time necessary to monitoring your financial plan, to include your investment accounts
Pay someone to review the hard work you’ve already done … and be coachable and open to suggestions
Stay the course when things get off kilter … if the market tanks, you aren’t going to sell everything and sit on the sidelines.
Be open and patient with yourself (and also collaborative with your family if applicable) as you take responsibility for the financial path you’re designing

If you find yourself falling somewhere on the hybrid-DIYer scale and you’re ready to engage in advice-only financial planning, use the link on my website to schedule your initial consultation!

Be Your Own Best Advocate

A lot of people are intimated by personal finance. And that sense of intimidation quickly turns into guilt and shame. Next? Usually nothing. Most people stop there. The thought of asking for help or getting started is often either overwhelming or just gets categorized as not important. As a planner and coach, I witness this every day in clients and prospects. But I also witness great transformation and the blossoming of hope and trust in one’s own ability to direct their life. To me, that is powerful. To recognize that you don’t know something yet, and then to move bravely forward to discover, matters deeply.

There may be a lot you don’t know yet and that’s ok. The best place to start is by identifying your values, learning the very basics of personal finance, and building a solid foundation by stopping the debt cycle, building savings, and learning the power of a budget in achieving your dreams.

It’s amazing how those basic components will give you the confidence you need to take the next steps in building wealth. But in your rush to win with money, please don’t get ahead of yourself. Incremental steps matter, as do the order in which you tackle them. Would you begin to decorate the interior of your home before construction is finished?

For example, pouring a majority of your resources into investments or buying an insurance product before you have a solid financial foundation may not set you up for the success you think it will. Investments alone won’t generate true wealth. A product is not a plan. Understanding the stock market – even just investing in it – isn’t synonymous with understanding your relationship with money, how you behave with it, or even how you communicate about it with your family. It’s our mindset and our behaviors that will ultimately lead us to the type of wealth that allows us to experience our values-driven dreams day in and day out.

Know yourself first. Know where it is you want to go – at least a clear enough picture to get started. Then you’re ready to be your own best advocate as you move forward and engage with a set of trusted advisors across disciplines to help you build the life of your dreams.

Crystal Clear

Clear is kind. Unclear is unkind.

~ Brené Brown

One of my favorite authors is Brené Brown. If you haven’t watched her Ted Talks (or read her books) already, I highly recommend doing so. Brené has done extensive research over 20 years on the emotions of shame and vulnerability and presents her findings with a straight-forward, plain spoken style you’d expect of someone from Texas. She often infuses her stories with humor, providing some levity to the tough subjects she tackles. The topic of personal finance is full of the same tough subjects she writes about, so you’ll often see me reference her work as it relates to our conversations on financial well-being.

In her most recent book, Dare to Lead, Brené introduces us to a versatile and useful principle: to be clear is to be is kind – to be unclear is unkind. To be clear with others, and clear with ourselves, is one of the kindest, most respectful things we can do. Clarity provides direction (or at least an initial compass read), boundaries, and expectations. It is easier to make the decisions that lead to achieving your goal when you have clarity of purpose and direction. Without clarity, you’re more likely to wander around and do what feels good in the moment. In other words, you’re more likely to be impulsive. And I think we can all agree that impulsivity often leads to decisions and actions that aren’t always the most kind or respectful to ourselves or those around us. The clearer you are, the less confusing things are; for yourself and those around you. When others don’t have to guess at what you want or what you’re thinking, and the less YOU have to guess at the steps to take to get where you want to be, the more respectful you become of four of our most valuable resources: time, energy, attention and money.

Let’s take a look at how being clear in your financial life can be an act of kindness and respect toward yourself and your family. Here’s a simplified example: If I’m frequently impulsive with my money, carry alot of debt and no savings, how do I take care of an ailing family member when they need me the most? How do I take care of my child if they get sick and I want to take time off work to care for them, without the added stress of bills piling up that I can’t cover because I’m not at work?

Here’s another one: planning for retirement always seemed complicated and a goal that was too far away to think about. One day you wake up and … guess what … retirement age is here! But … you don’t have enough invested to shift into this new phase of life – at least not in a way you were hoping for. Social Security will cover some of your basic expenses, but maybe it’s not enough.

The future may have seemed far away when you were 20 years younger, but when it arrives, it’s right in front of you and you have to deal with it just the way it is. In the book, Loaded, author Sarah Newcomb reviews numerous studies on the psychology behind money, our values, and how to take charge of our financial future. The first concept she outlines is that of future discounting. That’s a fancy term for our attitude toward the future; the farther away something is from today (say, retirement or our concept of self at retirement age) the less likely we are to pay attention to it – we discount it. As a result, we are not as likely to plan for future phases of life when they’re a long way off.

One way to combat this natural tendency we all have is to get clear about what we want and who we want to be in the future. Ahh, it’s all coming together! Clarity and proximity … they work together. Studies show that people who have a clearer picture of their future and who they want to be have more positive financial behaviors and more positive emotions towards their financial situation (regardless of income level). Those who have a vague notion of their futures and future selves have less than desirable financial behaviors and have more negative emotions around their financial situation.

Let’s break this down a little more. What’s a clear picture of your future mean, exactly? It means that you have a pretty good sense of who you want to be (in 5, 10, 20 years) where you want to be, with whom and what you’d like to be doing. This vision of your future need not be set in stone; obviously life changes and we adjust to remain resilient. But, when we cozy up to our future selves and take an active part in designing this future self by creating a clear and detailed enough picture, our behaviors and emotions are more positive, and we’re more likely to create the habits that shape the behaviors to achieve our goals!

Our impulsivity is lessened which means those annoying habitual reactions to our impulses can no longer adversely impact our key financial behaviors. Let’s take credit card use for example: instead of using credit cards to finance purchases (assuming the bill is not able to paid off at the end of each month), someone who has a clearly detailed vision of where they’re headed is more likely to NOT use credit cards and save up to make purchases, thus keeping themselves (today’s self and their future self) out of the destructive debt cycle. If you’re a naturally impulsive person, here’s a personal financial tip: practice using debit instead. Unlink your credit card to Amazon or other apps where spending is just a click away. You can help keep temptation away by getting rid of the thing that enables you to be impulsive.

In summary, get clear on, and cozy up to, your dreams in life. Make a vision board. Paint a picture. Write out a list. Try out a free age-progression app (such as AgingBooth) to see what you might look like later in life (always good for a laugh with friends … but does help you start to create empathy for the future you and motivate you to take care of that version of you!) Do what works for you to begin the process of creating a clear vision for your future. And if you need some extra guidance or accountability, the financial planning process is designed to help you gain clarity and create a plan to help achieve your goals.