SPENDING. A financial planner will help shape your thinking, so you can establish and prioritize goals. “People tend to live for the moment and cultivate a lifestyle based on their current cash flow,” says Phil Selden, chief compliance officer of Secaucus-based United Advisors Wealth Management.
TAXES. “Your tax accountant is looking at what has already happened, a financial planner looks at what hasn’t yet happened,” says Selden. “Every dollar you save in taxes is as valuable as every dollar you gain in investments. It’s our job to be critically aware of what you are required to pay and to make sure you don’t pay a dime more.” Bunching—prepaying certain expenses and itemizing your taxes one year in order to be eligible for the standard deduction in a subsequent year—is the type of long-view solution a financial planner provides.
RETIREMENT. The end goal of much financial planning is to accumulate a nest egg for when you stop working. “What costs a dollar today, will cost a buck-fifty tomorrow. You can’t just save without factoring in inflation,” says Selden.
TRUST. An established relationship with a financial planner can help ease the burden of sorting out a loved one’s estate.
MARKET TURBULENCE. The market has been a rollercoaster—should you pull out? If you do, will you miss out on the upturn? “Don’t let emotions rule investment decisions,” says Selden. “A dispassionate third party can help you avoid panic-based choices.”
How to Choose a Financial Planner: In New Jersey, financial planners are not licensed, so choose wisely, says Patrick Gilmore, president of the Financial Planning Association of New Jersey (fpanj.org). Check credentials, get referrals, and ask upfront how they will be compensated. Services may be fee-only, which typically includes a consultation with suggestions but not implementation of a plan, or structured as a recurring fee with a commission based on the assets managed.