What's the Value in Working with a Financial Planner?

David Stone |

I like most people when shopping for a service have one main question on my mind, “How much does it cost?”  The presentation can be great and the service provider may be telling me everything I want to hear, but the bottom line is “How much does it cost?” Naturally being a service provider, I’ve been on both sides of the situation, and I certainly understand each side of this coin.  What I’ve come to realize, it’s not about the cost I’m paying, but the value I’m receiving for the service.  I will certainly pay more for a service, if the value I’m receiving for the service exceeds the cost.  This leads us to the subject of this blog, “What’s the Value in Working with a Financial Planner?

Every person has their own definition of value, especially when it comes to such an intangible service such as Financial Planning.  As technology continues to impact Financial Planning, the industry becomes more and more commoditized which drives down costs and makes the value of our services even more pertinent.  Over the years when having fee discussions with clients and potential clients I’ve heard a few common perspectives on the value of Financial Planning such as: I expect you will make me more money than it costs for your services, I don’t have the time or expertise to do this stuff, or I don’t know anything about finances and I don’t want to deal with it, that’s why I’m paying you.

These perspectives on the value of Financial Planning are very valid, but also quite superficial.  Our purpose is to make the world a better place one client at a time.  Delegating your finances only scratches the surface of the REAL value of Financial Planning.  Yes, freeing up our clients time and energy is certainly valuable, but my questions would then be, “What are you doing with all that extra free time and energy?”  If you are just sitting around watching TV, or playing computer games the value might be overstated.  However, if you are using this extra time to help people less fortunate than you, or devoting yourself to a cause that is important to you the value is much greater.

Let’s stick with our theme of making the world a better place by utilizing Financial Planning services.  Suppose we have a couple who have a lot of credit card debt, and have to work part time jobs in order to make ends meet.  If a Financial Planner can help them implement a debt elimination plan so they can be debt free in a timely manner.  They can quit their part time jobs in order for them to spend more time with their children.  Suppose there is another person who has done their own investing their whole life, but finally delegates it to a Financial Planner as he gets closer to retirement.  The stock market then goes through a correction and the client wants to get out of the stock market, but the Financial Planner assures him the portfolio is diversified and the investments will have enough time to recover before it is time to retire.  As it turns out, the Financial Planner enabled his client to retire on schedule by preventing his client from making a devastating investment mistake since the portfolio would not have had enough time to recover after the client exited the stock market.  Lastly, how about the wealthy executive who has a husband and young children, but no will or guardians for the children.  The Financial Planner introduces them to an estate planning attorney who is able to create an estate plan that includes trusts, durable powers of attorney, living wills, and guardians for the children which will direct trustees and guardians on taking care of the kids in the event of a personal catastrophe.  The amount of peace of mind for the parents is invaluable.

Hopefully I have been able to convey the point of this blog, which is the value of Financial Planning is not necessarily about the money.  Financial Planning is about the quality of life for our clients, and helping them have the lives they want to live.  If our clients are able to live the life they want to live, they will be able to make the world a better place.


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