Our Comment by J. David Lewis – Believe it or not, I am glad to see services like these. Many people need and deserve financial planning help. Far too many have told us they didn’t think they had enough to be our clients, when we have been able to help them in many ways. A minimum fee structure, instead of requiring a minimum portfolio, permits us to help several clients who now have growing resources. We will do all we can to help those who are serious about improving their resources, even to the point of helping them find one of these services.
By EMILY GLAZER
You dont need a high net worth or complicated investments to create a financial plan.
There are a crop of new resources that let you get financial-planning services on the cheap. For a flat or hourly fee, a certified financial planner can help you develop a savings plan, get your budget in order and pay down debt. Enlarge ImageClose Andy Rash
But keep in mind that you get what you pay for—so dont expect any of the bells and whistles of a full-service financial-planning or brokerage firm. Some financial planners dont offer any investment advice. And most of the consultations are done over the phone and via email. Whats more, some financial experts warn that this isnt a solution for every investor since the quality of financial advice can be limited. And you may want to do some due diligence on the financial planner you are considering.
Contact J. David Lewis directly with dlewis@resourceadv.com or share your thoughts on this topic below. He founded Resource Advisory Services in 1985. National Association of Personal Financial Advisors (NAPFA) was formed only a few years before. Lewis became a NAPFA-Registered Financial Advisor in 1986. He is a passionate advocate for fiduciary, fee-only financial planning and has been associated with financial services since childhood in a banking family. 58522
Our Comment by J. David Lewis – Several days ago, a Board Member for National Association of Personal Financial Advisors and a colleague I respect a great deal, asked me to help with a definition for the term “financial planning.” Having taken the time to consolidate my thoughts, I decided to make the exchange public.
Hi David,
I am working on developing a definition of financial planning. Short and sweet. I am asking some colleagues whom I respect to take a stab at it. You wanna give it a try?
Thanks, Mary
——
Hello Mary,
Thank you for the compliment. Coming from someone with your history, the request is humbling. You said “Short and Sweet,” which I must leave to you in crafting a definition from a variety of contributors. I have written a few words I consider worthy of consideration as a building block for a definition that will resonate with me – hopefully others. I write so much to give these few words my context for them. I am using a different color font for the words I consider most significant.
My vision for financial planning goes all the way back to one event in my memory. As a banker, about 1981, a “financial planner” who was affiliated with an arm of that bank did his sales pitch to a group in the bank lobby one evening. He opened the meeting by saying that a financial planner was someone with extensive knowledge of many aspects of personal finance, from deposits and loans through estate planning, investments and insurance. My experiences from my family’s bank before that job told me immediately there were many people who needed that service. Being young – and drinking from the company cool-aid – I believed this guy brought our bank customers a great service. Of course, he proceeded to sell life and disability insurance - then limited partnerships. If they had any money left, they got mutual funds. I was severely disappointed, but never lost that definition, which was later refined when I discovered the existence of NAPFA in 1984. I founded Resource Advisory Services in 1985 and joined NAPFA in 1986.
The Resource Advisory Services Mission Statement is:
“Developing relationships that help people build AND enjoy wealth, through our commitment to excellence in comprehensive financial planning services, where we gladly accept fiduciary responsibility for understanding and serving each client with an exceptional level of ethical integrity.”
While this statement uses “financial planning” without defining it, the first item of our Vision Statement sheds light on the essence of what the term means to me (us):
“I want Resource Advisory Services to be known as a place where clients can trust us with every detail of their personal financial affairs, not only because of our high level of ethical integrity, but also because we have the ability to understand their personal and financial needs, and arrange for efficient and effective services that will help them enjoy their wealth.”
There is More to Money than Money® comes right out of these two foundation sentences. The concepts of relationships and enjoying wealth have a great deal of importance to me in financial planning. It is not all about building. It has more to do with helping clients have a clear and realistic understanding of how strong they are financially and whether they are making progress at a rate that is likely to eventually help them feel they are secure in their financial needs. Is there reasonable evidence for the client to feel secure at the level of wealth they have now? Making it clear that some clients do not need more wealth for their stated goals seems to have been our greatest contributions for more than a few clients. As they see unfolding evidence this is true, their liberation gradually blossoms. It is beautiful. When they need more, helping them see progress adds to their feelings of security and enjoyment, even if they are far from their goals. In some cases, it seems to have been an exceptional service when they saw that a stated goal was just not feasible without sacrifices they were not willing to make or just completely impossible no matter what they did. Some of these seem to take pressure off themselves, adjust to the disappointment and feel better in time. Of course, a few didn’t want to see the circumstances and decided not to be clients. The various segments of CFP® philosophy are tools, not the essence of building and enjoying wealth. I think the idea of helping clientsbalance building and enjoying is at the essence of financial planning.
I hope this helps you and others as you choose the words that eventually become the NAPFA definition for financial planning. Thank you for working on this. It is important. If you have drafts you want me to comment on, I will be glad to tell you what I think. I have opinions on many things. Apparently I am genetically incapable of being embarrassed about expressing them.
David
Contact J. David Lewis directly with david.lewis@resourceadv.com or share your thoughts on this topic below. He founded Resource Advisory Services in 1985. National Association of Personal Financial Advisors (NAPFA) was formed only a few years before. Lewis became a NAPFA-Registered Financial Advisor in 1986. He is a passionate advocate for fiduciary, fee-only financial planning and has been associated with financial services since childhood in a banking family. 52877
Our Comment by J. David Lewis - This is a very short and easy to read list of six items anyone should read when they consider hiring a financial adviser. There is more to money than money.® We believe working with a financial advisor is more about the relationship than the mathematical matters of money.
3. Be picky. Get to know several candidates before settling on one. Personal chemistry matters, and there’s no point spending your money on advice from someone with whom you don’t feel at ease. Most advisers will give you a complimentary introductory session — in order to go over your needs, their process and what you can expect their services to cost — before you make a formal arrangement. Take advantage of these sessions. A good adviser should spend at least an hour learning about your full financial picture — including, for example, your goals, income needs, tax status and health, as well as the quality of your insurance coverage — before recommending any specific investments. It’s a red flag if he or she gives you a breathy spiel about some hot investment within the first five minutes of meeting you.
Contact J. David Lewis directly with david.lewis@resourceadv.com or share your thoughts on this topic below. He founded Resource Advisory Services in 1985. National Association of Personal Financial Advisors (NAPFA) was formed only a few years before. Lewis became a NAPFA-Registered Financial Advisor in 1986. He is a passionate advocate for fiduciary, fee-only financial planning and has been associated with financial services since childhood in a banking family. 50492
After a very robust start to the stock market recovery, a correction occurred in May of this year. So far, the decline seems pretty much confined to May. For the three months since May 31, volatility has been significant. Technically, the three-month S&P 500 Index return was -3.17% to August 31. However, the first day of September gained +2.95% for the Index. With a slightly different three months, the S&P return could have been virtually unchanged or positive. The number of short-term swings this summer has sometimes been nerve wracking. For two consecutive months, my grandchildren’s purchases were on a dramatically up day, when I want them on down days. This is enough to wear on the patience of almost anyone.
Generally, most economists we follow continue to say a slow recovery is underway. In the last days of July, Bryan and I heard an Atlanta Federal Reserve economist discuss his analysis in considerable detail. People continue to save and reduce debt, instead of buying products that create jobs. Businesses are very careful about hiring, because they are uncertain products and services will be bought. It is ironic that improving personal finances for so many consumers is creating a challenge for the economy in general.
An interesting “antidotal side story” on this is the number of new clients who seem to have been moved to ask for our help. If this trend is prevalent among our colleagues, we consider it more evidence people are getting their personal financial affairs in better order. Our work on comprehensive financial affairs; instead of focus on just investments or just other financial products; seems to be in more demand these days.
Also, during this summer new Financial Regulatory Reform finally became law. From our perspective, it will probably improve things, at least some. Making financial institutions stronger got much of the media attention, with less emphasis on measures to protect consumers. The latter of these has been important to us since the beginning of Resource Advisory Services and its professional organization National Association of Personal Financial Advisors (NAPFA).
We believe strongly that everyone who works in a position that might give individual financial advice should be held to a Fiduciary Standard. Too many sales people, who are not required to act in the best interest of their customers, can very easily appear as though they are advisors. Fee-Only service and Fiduciary standards should be improved.
Our colleagues made a very strong effort to incorporate these requirements into the Financial Regulatory Reform. At Resource Advisory Services, we called attention to the debate through our WUOT FM 91.9 sponsorship announcements and our blog. In the end, the bill did not include language for a Fiduciary standard. Instead, it gave the Securities and Exchange Commission authority to issue rules for a required Fiduciary standard, after a mandatory six-month study.
We are hopeful their decision will improve transparency for every relationship between financial advisors and clients. There will be many who lobby to avoid these responsibilities. I personally remember being a banker who complained vigorously about Truth in Lending Legislation implemented in the 1970s. Now, as a fiduciary, representing our clients’ best interests, I am thankful for clear, concise terms in borrowing transactions. If the SEC can be convinced to establish regulations with similar benefit for any buyer of mutual funds, annuities, or life insurance policies, our world will be better.
Yes, Resource Advisory Services’ number of competitors will likely increase. That is alright. We have been a fiduciary for twenty-five years. The fiduciary culture is ingrained in virtually everything we do. That means we are most interested in the best interest of our clients, including our understanding their ability to choose advisors who may serve them better than we can. There is more to money than money.® We want everyone who looks like a financial advisor to serve with their clientele’s best interest at heart.
Our Comment by J. David Lewis – I participated in this National Association of Personal Financial Advisors (NAPFA) video, which explains very important concepts in financial services. Before Resource Advisory Services was founded 25 years ago, I believed in fiduciary and Fee-Only financial planning. When the chance came to help explain and promote these concepts, I jumped at the opportunity.
J. David Lewis founded Resource Advisory Services in 1985. National Association of Personal Financial Advisors (NAPFA) was formed only a few years before. Lewis became a NAPFA-Registered Financial Advisor in 1986. He is a passionate advocate for fiduciary, fee-only financial planning and has been associated with financial services since childhood in a banking family. Contact him using david.lewis@resourceadv.com.
Our Comment by J. David Lewis – National Association of Personal Financial Advisors publishes this newsletter six times a year, as a public service, by asking members to submit educational articles. I think the article titled “The Role of Human Emotions in Financial Advice and Planning” is quite good (page 5), because of its relationship to There is more to money than money.® Although it talks mostly about the feelings when the markets collapse, with a little on the euphoria when it seems there will never be an end to the current boom, most recently we have seen a great deal of week to week volatility. These times also make people feel uncomfortable. In our conversations, we have seen evidence most people have not recognized the significant overall gains in June and so far in July. It is our job to help people see more than the current news headlines. “Savvy Investors are Cost-Conscious” (page 2) and “Simple Ideas for Your Financial Well-Being” (page 4) are also interesting this time.
The consumer e-newsletter of the National Association of Personal Financial Advisors (NAPFA)
J. David Lewis founded Resource Advisory Services in 1985. National Association of Personal Financial Advisors (NAPFA) was formed only a few years before. Lewis became a NAPFA-Registered Financial Advisor in 1986. He is a passionate advocate for fiduciary, fee-only financial planning and has been associated with financial services since childhood in a banking family. Contact him using david.lewis@resourceadv.com.
By EMILY GLAZER
