Free Financial Planning – One Must Give Before They Can Receive

The general concepts of financial planning are heavily rooted in high moral and ethical standards. Rather than randomly investing and making general assumptions regarding one’s finances, the true purpose of a financial plan is to provide a detailed and unbiased understanding of one’s financial picture in order for them to achieve their specific goals. Establishing a foundation of financial planning has helped many clients and advisors alike bring logic and reason as to why and how to invest, helping to supplant the negative emotions of investing with a sense of financial confidence and security. With this said, one could suffice that a financial plan would be the basis for nearly all financial decisions. Likewise, it could be utilized by nearly every financial professional in helping determine proper suitability for their clients. Needless to say, all people would benefit from an objective financial analysis by a qualified professional, and these professionals would then benefit from implementing their unbiased advice. Why then should a client have to pay for financial planning services in the first place? Or, to put it more directly, why should a client have to pay a fee in an attempt to ensure that their best interests are being met? The answer is rather straight forward. Financial planning should be free.

The first question that must come to mind is, “Well then how does the financial planner make a living?”. Believe me when I tell you, they make a living, and a handsome one at that. It is not the financial planning fee from which they reap their vast rewards. When a client pays for a “financial plan” they are paying only for advice. The advisor or planner is still going to receive a commission from implementing the plan, and that is where the majority of their income is produced. So be careful of a professional who designates themselves as simply, “fee-based”. This means that they are either charging for the financial plan while also collecting a commission, or even worst, simply charging a management fee for allocating your portfolio. Unfortunately, not many financial professionals let this be readily known, and make it appear as if they are being compensated only for their expertise in the form of the financial planning fee.

So with a check already in hand, how sure can the client be that the advice thereafter is going to be truly objective? With a monetary commitment from the client, the professional is then in a position of power and is required to only fulfill an obligation, not provide true value. By paying for financial planning services the advisor is stating that the client’s best interest cannot be obtained without proper compensation. Thus, any value above and beyond what the client has paid for is not expected on the part of the advisor. So, not only is the client paying for your best interest to be met but that best interest may not be fully obtained. Remember, a financial planner is a business owner. Their time is equal to money, so with a check already in hand, the client is giving them permission to do “just enough”. They are only compelled to fulfill a contract, not add value.

Free financial planning builds a foundation of honesty. By exemplifying their services and not simply fulfilling an obligation, the financial professional must earn the client’s trust, highly raising the likelihood of the client receiving objective recommendations. Granted, many financial professionals believe themselves to be of the highest integrity, but the only way for the consumer to be sure of this is for the advisor to put their money where their mouth is. You would be surprised how many financial advisors who pride themselves on their virtues would magically change their tune when their recommendations (aka: their time and effort) must result in implementation to ensure their income.

The two main objections that a financial planner may have against free financial planning are that their time and their credibility may be compromised. To begin, it is true that a business owner’s time is their most valuable asset. In fact, their time may be more valuable than money itself. The argument follows that if they are spending their time putting together recommendations for clients who may not implement them, it can severely cut into their profitability. This ideal is flawed on many levels. First and foremost, if an advisors is lacking the confidence to offer free services in fear that their work may not be accepted, it demonstrates that the bottom line and not the clients well-being is paramount above all else. Thus they lack the confidence to properly represent the client’s needs and fulfill their objectives. However, the most obvious reason for an advisor or planner to offer financial planning as a free service is monetary. In offering their financial planning services for free, a financial planner is establishing a relationship of trust and honesty with their clients. This strong foundation will inevitably result in a multitude of referrals for the advisor, which are the life blood of their business and the ultimate maximization of their time and effort. The small percentage of income that a financial planning fee provides for the advisor pales in comparison to the financial gains experienced by a steady stream of high-quality referrals. Indeed, when a financial professional stops concentrating their efforts on instant gratification and begins to operate an honest and trustworthy business, the long-term benefits will assuredly follow.

Here, the idea that free financial planning downgrades the financial professional’s credibility is defeated. An advisor may believe that they are devaluing themselves in the eyes of the prospect by offering their services for free. However, true credibility is established by providing exemplary service, not by the fee that is charged. The truth of the matter is that by offering their financial planning services for free, the financial professional is maximizing their time and legitimizing their credibility. If they do not succeed using this method, then they are not going above and beyond for their clients, and do not deserve their business nor their referrals. It is a win-win for all parties. The client receives the objective advice they deserve, and the advisor maximizes his time and effort.

If I call my doctor with what I believe to be heart burn, I do not want to pay for cardiovascular surgery ahead of time. I want to be properly evaluated, given a professional diagnosis, and then billed accordingly. In something as vital as an individual’s personal finances, business should be completed in a similar fashion. It is absolutely imperative that an individual receive the most objective advice possible in regards to their financial future. By giving first and receiving later, the financial professional is more likely to provide that objective advice and will go above and beyond to fulfill the client’s needs. Consequently, by providing the client with the services they deserve, the advisor will be rewarded with a highly reputable and profitable business.To be sure, the public should let the experts have the opportunity to perform their duties. However, as with the majority of other professions, they should at least earn the individual’s trust through hard work and exemplary service.

Common Financial Pitfalls Of Divorce

Nearly 3 million men and women go through the devastating trauma of divorce each year in the United States. For many of these individuals, the strain is intensified by the fact that they took a “hands off” approach to finances during the marriage. Faced with divorce, these “non-financial” spouses are at a disadvantage when it comes to dividing up the marital estate and planning for long-term financial stability.

But all is not lost. Knowledge is power, and learning about the common financial pitfalls of divorce can help the non-financial spouse face life during and after a divorce with confidence.

Not Identifying All The Assets

For a non-financial spouse, understanding the assets the couple owns can be a challenging proposition, especially if his or her spouse has been secretive with financial management during the marriage. It is no surprise that assets are often overlooked by the non-financial spouse during divorce. Yet even if an asset is unwanted, it has value and can be traded for another asset the non-financial spouse may want. For this reason, it is critically important that all assets be identified early on in the divorce proceedings, even if this means hiring a forensic accountant (a sort of financial detective) to uncover them. Before the divorce begins is an excellent time to start collecting paystubs, bank and investment account statements, insurance policies and any other documents related to finances.

Mixing Money And Emotions

Divorce brings with it an emotional roller-coaster, especially when it comes to marital assets and property division. While it may seem like a good idea to keep the marital home out of spite or nostalgia, any decision on which assets to demand in a divorce should be made on each party’s long-term best interest – not revenge. While the divorcing parties may loathe each other, transferring those feelings to the “nuts and bolts” of issues like property division only benefits the lawyers. At the end of the day, fighting just to fight will only deplete the marital estate.

Not Fighting For A Fair Share

When it comes to property division in divorce, the general rule of thumb is “equitable division.” While this doesn’t necessarily mean equal, it does mean that each spouse is entitled to his or her fair share of the assets amassed during the marriage. Often times, the non-financial spouse is too intimidated or exhausted to fight for his or her rightful share. Yet to ensure long-term financial security, each spouse must stand up and fight for what he or she deserves. Once the divorce is over and the property divvied up, there is no going back to get more.

Inadequate Records

One of the first things any divorce lawyer will ask from a new client is documentation related to the couple’s finances and assets. Copies of bank statements are usually not enough. If a divorce action is contemplated or has already begun, collecting as much documentation as possible is absolutely required. Tax returns, wills, trusts, loan applications and statements, investment and brokerage statements, insurance policies, deeds for real property and credit card statements are just a few of the items that should be located and copied. If a spouse owns a business, obtaining as much documentation as possible related to that business will go a long way towards finding hidden assets.

Ignoring Reality

While it may seem appealing to bury one’s head in the sand in the midst of the chaos caused by divorce, this is one of the worst things that can be done. So is adopting the attitude of “let the attorneys handle everything.” While legal counsel is there to vigorously represent their client’s best interest, only the client knows what is truly important. Taking an active role in the process, including participation in negotiations, focusing on practical matters, and making decisions based on facts rather than emotion, will all go a long way toward creating a strong post-divorce financial future.

Not Enough Cash On Hand

Once a divorce is filed, expenses will explode. Often times, one spouse will leave the marital home, resulting in a second set of living expenses that didn’t exist before. Add to this legal fees, court costs, therapy bills and other unexpected expenses and even a spouse with a good salary will find themselves financial stretched. The best time to financially prepare for divorce is before it begins. This is the time to amass as much cash as possible to help weather the tide.

Not Enough Preparation

A divorce isn’t over in a week or even a few months. On average, most divorces take up to a year to be finalized. In some cases, a divorce can linger on for much longer. Understanding that this is a marathon and not a sprint, it makes sense to prepare properly before entering the race. Anyone contemplating divorce should first consult with legal and financial professionals and educate themselves about the process. Timing is also important. If a spouse is expecting a financial windfall (e.g. annual bonus, stock option grant, etc.), the other spouse filing for divorce before that happens could be a costly mistake. Social security is another consideration. A marriage of 10 years or more entitles one spouse to collect benefits based on the other spouse’s earning record.

Not Mentally Preparing

The only certainty that divorce brings is that lives will be thrown into complete upheaval. It is important to mentally prepare for all possibilities. While the worst usually does not happen, speed bumps along the way can be amplified if they weren’t at least considered beforehand. It is important to consider even the most far-fetched scenarios – a spouse disappears and refuses to pay support, a major illness occurs, all financial resources are drained during the divorce. Thankfully, these “what ifs” don’t often occur. Yet, by thinking through the scenarios puts whatever actually happens is put into perspective. It helps to keep panic at bay.

Failing To Look Forward

For many spouses, their career was given up to raise a family. When divorce occurs, these spouses are disadvantaged in terms of re-entering the workforce. It is important to stay strong and begin developing new skills sooner rather than later. Resources such as career counselors at local universities, job centers or community colleges can help to identify suitable interests and opportunities.

Allowing Panic To Take Control

The divorce process seemingly brings with it a crisis around every corner. Whether it is an unexpected bill, escalating legal fees or a stubborn spouse who challenges every decision, there is no shortage of things that will keep a divorcing person up at night. Countless hours are spent tossing and turning, worrying about all the “what ifs.” Instead of letting these worries become all-consuming – and making poor financial decisions based on fear rather than logic – it is important to find some means of stress relief during the divorce. Whether it is yoga, kickboxing or simply writing down your fears and revisiting them in the clear light of day, allowing panic to take control during a divorce will only have a negative long-term impact.

Ignoring Tax Consequences

A major component of any divorce is dividing up the marital assets. Real estate, retirement accounts and investments each come with their own set of pros and cons, especially when it comes to liquidity and taxes. For example, it may be tempting to want the marital home, but that may not be the best financial decision. Maintenance and upkeep are often underestimated, and it can quickly become an albatross rather than an abode. Likewise, accepting a retirement account instead of cash could tie up assets for decades or more. It is important to consult with an accounting and tax professional to ensure that the full implications – both short- and long-term – of any final property division are understood.

Failing To Get Solid Professional Advice

While it may be tempting to save a few (thousand) dollars by trying to go it alone in a divorce, this is usually a very unsound financial decision in the long run. Divorce can be a very complicated process, and without sufficient legal and financial knowledge rights can be unwittingly given up. Hire the best attorney you can afford – not the cheapest. The old adage, you get what you pay for is usually true. Likewise, consider a forensic accountant if you believe assets are being hidden. A divorce financial professional can also be one of the best investments to secure a solid financial future.

Financial Needs Analysis

Financial Needs Anaysis (FNA) is defined as a process to identify individual financial needs in order to strategise an investment plan that meet such needs and financial goals. Before I go into details about FNA process, let me explain the three broad categories of financial needs;

(i) Accumulation Needs It is defined as a future financial need that one desire to set aside. The motivation to accumulate a sum of money in future include children education, starting a business, property investment, buying a car, retire early or giving to charity.

(ii) Retirement Needs It is defined as financial need that provide fund to support our life after our retirement. When we retire, our pension or social security benefits begin but our earned income ceases. Our working expenses reduce but our leisure and medical expenses increase.

(iii) Protection Needs It is defined as financial obligations that we need to fulfil upon death, disablement, contracting critical illness, loss of or damage to property and/or when a personal liability arises.

Having a general idea about the three main categories of financial needs, let me go through the process of Financial Needs Analysis:

(1) Fact finding –> (2) Identify and quantify financial needs –> (3) Identify investment products that meet financial goals –> (4) Periodical review of financial needs

1. Fact Finding

Gather personal details, employment details, number of dependents, financial information, existing insurance policies, retirement needs, saving goals, objective and investment preference. Personal details such as age, gender, martial status and smoking habits will offer us a preliminary assessment of the types of financial products that will likely suitable for us. Employment status enables us to determine if income protection is needed for high risk job, and the ability to commit long to medium term investment product. The number of dependents will determine the amount of additional financial support. The more dependent we have, the greater the number of years we have to support them, which means we need more life insurance and income protection. Financial information such as monthly income will help to determine the continuing income needed in the event of death, disability or retirement.

Expenditures information will help to determine the level of income needed for the family to survive in the event of premature death of the breadwinners, and to estimate the funds available for investment. Assets and liabilities information helps to determine net worth, which enable us to decide on the amount of funds for investment or to adjust our lifestyles to reduce liabilities. Existing insurance policy will serve as a starting point for any further insurance products. The objectives and investment preferences will help to determine our attitude towards investment risk, which classified into Risk Averter, Cautious, Balanced and Risk Seeker. Retirement needs information enables us to determine the monthly amount in today’s dollar that we and our dependents need to live on retirement. Generally, most singles need about 50% to 60% of their pre-retirement income to maintain same living standard after retirement. The percentage increase to 60% to 70% for married couples with one retiree. Saving goals information helps to determine if the funds earmarked for various financial goals are adequate.

2. Identifying and Quantifying Financial Needs

After we have gathered all the data through facts finding, the next steps of FNA process is to analyse the data to identify and quantify the financial needs. We should pick up weaknesses that can negatively affect the financial objectives. For examples; amount of debts, investment portfolio, existing insurance products, living within means, investment time horizon, liquidity need, children education and risk profiles. Determine which objectives should be given higher priority. Three factors should be considered when analysing objectives:

Establish if the objective is short-term or long-term. Short-term objective is more appropriate for retired person who may wish to increase income produced from investment capital. Long-term objective is more suitable for someone who want sufficient fund to send his new-born child to university in future. However, objectives can be both long and short term.
Establish if the objective is for the benefit of us or for others, such as dependants. For example, the objective may be passing our estate to our grandchildren in the event of death. Alternatively, the objective may be to retire early.
Prioritise the objectives. For example, we may want to invest a second property but to achieve this objective; it may detriment a reasonable income in retirement. It is important to tackle each financial need and uncover those needs that need immediate attention.

Once all the financial needs are identified and prioritised, each need must be quantified. The ways to quantify retirement, protection and accumulation needs are different. There are two methods to quantifying retirement needs, namely the replacement ratio method and expense method. As for protection needs, the method include determine the sum of total liabilities and immediate expenses required at the time of death and the amount needed for dependants as long as needed. Multiple approach and needs approach are two common approach used to quantify the amount needed for dependants. For accumulation needs, the approach is to find the future value of the target amount taking into consideration of inflation. After we have quantified the data, proceed to next step to identify investment products that meet financial objectives.

3. Identify Investment Products that meet Financial Objectives

Points to consider includes investment objectives, product suitability, affordability, taxation, tax relief, rick tolerance, pension schemes, prioritisation and effect of inflation and time value of money. Investment Instrument that meets accumulation and retirement needs includes Money Market Securities, Fixed Income Securities, Equity Investment, Derivative Instruments, Property, Unit Trusts, Whole Life Insurance, Endowment, Investment-Linked Products and Annuities. Investment products that meet protection needs include Term Insurance, Whole Life Insurance, Endowment Insurance, Investment-linked Life Insurance, Riders, Critical illness Insurance, Long Term Care Insurance, Medical Expense Insurance and Managed Healthcare Insurance and Disability Income Insurance. General Insurance products that meet protection needs include Fire Insurance, Household/House owner Insurance, Personal Accident Insurance and Personal Liability Insurance.

4. Periodical Review of Financial Needs

The process of identifying financial needs does not stop with implementation. Our financial needs may change over time. It affects our initial investment plan, as they may no longer be adequate. For example, a steep fall in price of equities would signal that a review of our investment portfolio and saving is required if we invested substantially in equities. Regular review of financial needs ensure we stay on course to our financial goals.

Financial Analyst: A Profitable Career Option for Finance Jobs!

In the current job market, the hottest job position that is more in demand is of financial analyst. A person who can meet the new expectations of the employers in the finance area will surely find more employment and professional growth opportunities.

Who is a financial analyst?

A financial analyst also known as a business analyst is a person who is involved in monitoring the financial movements of a company. The main task of an analyst is to evaluate a company’s financial risk and drafting financial forecasts. With the assistance of these analysts, companies can make well-informed financial decisions, develop cash flows, debt strategies and maintain their budgets.

Industries that demand financial analysts

There are several industries, which require a person for handling various finance related issues. Some of these industries include:

Accounting and Auditing services industry
Aerospace and Defense industry
Banking industry
Biotechnology/Pharmaceuticals industry
Business Services industry
Computer Software/Hardware industry
Construction industry
Consumer Packaged Goods industry
Education industry
Electronics, Components, and Semiconductor industry
Energy and Utility industry
Engineering Services industry
Financial Services industry

Financial Analyst Job Duties:

Evaluate an organization’s financial risk and prepare a report describing financial forecasts, financing options and capital management strategies
Assist in preparing a company’s budget
Determine cost of operations by collecting and analysing operational data
Identify the present financial status of the company by analysing and comparing actual results with plans
Establish various policies and procedures related to cost
Recommend various solutions to improve and manage financial status by monitoring and identifying financial trends
Maintain database by collecting, verifying and backing up data
Develop automated accounting applications with an aim to boost productivity
Keep financial information confidential
Work with company officials to gain a better insight into the company’s prospects and management?

Educational qualifications:

In order to get into this job position, one must have an undergraduate degree in finance, management, economics, statistics and administration. Having certifications and a graduate degree can notably enhance an applicant’s prospects. Furthermore, an internship during studies can be really fruitful in the long run.

Skills required:

Various skills required to become a successful analyst include:

Excellent communication skills including both verbal and written
Detailed understanding of companies
Superior analytical and organizational skills
Project management skills
Ability to create financial models
Ability to work independently and take sound decisions
Better understanding of financial and quantitative concepts
Must be able to manage multiple tasks, projects
Knowledge of computers and other latest technologies

Salary overview

In India, the average salary of a financial analyst is in between INR 3,00,00 to INR 4,00,00 per year. As the experience increases in this job position, the chances of higher income also increases. Furthermore, knowledge of various factors like risk management or control, valuation, SAS, SAP financial accounting, financial modeling, etc, can fetch you a smart salary.


A financial analyst job is definitely the most lucrative career choice, especially for those who are very good at analyzing financial concepts. An experience in this profile will provide you high income and other benefits. However, strong competition is expected for this job position. A deep understanding of the roles and skills and financial terms along with a relevant experience can boost your chances for getting the job.

Financial Planners, New York

Financial markets, all over the world, are rather complex in their mechanism. While everyone wishes to make profitable investments, not all can manage to do so. In New York finance markets too, investors can potentially make large profits. However, the risk of incurring losses remains as well. A common investor (and especially those without much prior experience in financial decision-making) needs to hire the services of a professional New York financial planner, in order to be able to make informed choices of investment projects. Indeed, a qualified New York financial planner can easily help his/her clients adopt the correct and profitable investment strategies, which often prove to be beneficial in the long run.

In New York, finding a financial planner is rather simple. Potential investors have a large number of firms providing financial advisor services. This saves investors the trouble of wondering how to choose a financial planner. Some of the prominent New York financial planners from which clients can make a choice are:

i) Programmed Financial Planning,

ii) GunnAllen Financial Services,

iii) Prince Financial Planning,

iv) Ravenswood Capital Group,

v) Northwestern Mutual Financial,

vi) Genworth Financial,

vii) Raymond James Financial Services,

viii) Smith Barney,

ix) Ameriprise Financial, and

x) Cowan Financial Group

Financial planners can help a great deal in choosing profitable investment projects for their clients. Advisors generally have a wealth of experience in dealing with financial instruments to bank upon, which makes them well-equipped to serve their clients. The financial stability and well-being of an investor is the primary focus of any good financial advisor, making them a valuable asset for the former.

However, in order to derive the maximum benefits from hiring a New York financial planner, the clients need to follow certain broad guidelines as well. First and foremost, they need to be certain of the exact nature of financial help that they require. Financial advisors can be grouped into various sub-classes, each performing specific and unique financial functions. Among the most popular financial consultants are certified financial planners, chartered financial consultants, personal financial analyst, registered investment advisor and chartered financial analyst. Each of them serve different customer needs; thereby making the choice of the correct type of finance advisor an absolute must for investors.

Investors also need to pass on complete information regarding their current financial status to their financial planners. Unless the former does so, advisors would not be able to find the best strategies for his/her clients. Expert finance planners are also adept at estimating the potential risk-preference (i.e., the ability to take risks for higher profits) of investors. Clients also need to have a clear idea about their target rates of return that they want from their investments. Such information must then be supplied to financial advisors, who can then design the investment strategies in the ideal way to meet the targeted return rates.

In New York, there are certain unique financial regulations that are worth mentioning. House-building projects are supported with special tax-free bonds (approved by the state Congress). This feature gives a major boost to all construction projects, which would be eligible to receive the tax-exempted bonds, with values up to $ 8 billion. This is a relatively recent financial feature that has been ratified in New York, presumably in response the 9/11 attacks, and its financial repercussions.

The New York finance markets are an ideal place for making profitable investments. Provided that investors acquire the services of qualified financial planners in New York, they can indeed zero in on the most profitable investment projects in the long run.

Sambit is a professional writer and a widely published author on a variety of topics including finance, stock market, investments, insurance & accounting. He has shown countless Americans the best way to find a financial planner or adviser to solve some of their financial headaches, reviewing all the good and the not-so-good offers that are available today. Sadly, there are simply too many promises that never really deliver and end up just wasting people’s time and money. And yet, there are some really good ones.