Welcome to Highland Financial Advisor's comprehensive video series, designed to guide you through the crucial steps of interviewing and starting a relationship with a fiduciary financial advisor. Whether you're new to financial planning or looking to optimize your current strategy, our clearly defined process and expert advice will help you make informed decisions. In this series, we'll cover everything from understanding fees and value to setting financial goals and creating a personalized wealth management plan. Subscribe now to stay updated and take control of your financial future with confidence.
Introduction to Our Series
Hi everybody, welcome back to the Highland Financial Advisor video series on things you should think about if you're going to be interviewing or starting a relationship with a fiduciary financial advisor.
Our Defined Process
Here at Highland Financial Advisors, we have a very clearly defined process. In the first video, I suggested questions to ask and things to look for in an advisor relationship. In the second video, I talked about fees, things you should be aware of, costs you could incur, and the difference between focusing on fees as a cost and thinking about the value received and what may be a reasonable fee for you. If you haven't seen those, please go back and watch those videos. If you'd like to subscribe to the series, click the button below, and you'll be alerted to any new videos.
Starting a Financial Planning Relationship
Initial Steps
Today, let's assume you've gone through that process, asked good questions, understand the fee structure, and believe you're going to get good value for that. So, let's assume you either start a relationship or you're going to start doing some initial planning on your own. What is the first thing you should expect someone to do with you in that relationship?
Importance of Goal Setting
I can tell you now that if the first thing out of their mouth is to talk to you about investing your money, you need to stop them and say, "Shouldn't we talk about my goals and my financial planning before selecting investments?" Because there is a direct relationship between that and your portfolio, which should depend on the goals you set up. I don't know how anybody can invest a portfolio and then go back and do planning and say, "Oh, maybe we should change your portfolio." Be aware of that, even if you're doing this yourself.
The Discovery Process in Financial Planning
Goal Planning
The first piece of financial planning we call "Discovery" in our process is basically goal planning. I remember back when I started in the business in the early '90s. We wanted to talk to people about financial planning. There was some very basic financial planning software out there, or people did it on Excel spreadsheets. The basic financial planning software, many of which are now free to use on the internet, allowed you to do some of this yourself.
Using Questionnaires for Financial Planning
These were all based on a questionnaire designed to ask questions so you could fill in the necessary inputs into the software to generate a report. This report was nothing more than something called a capital needs analysis. They asked you a lot of questions, but only two or three were relevant. The number one question was when you want to retire, how much money you need income-wise when you retire, and what the assumptions for inflation were. With these three inputs, someone could put that into a computer and tell you, based on how old you are now, when you want to retire, how much money you have now, how much income you need when you retire, and what you think inflation will be. They would come back and say, "In order for you to reach your goal by that date, you're going to need to acquire this much money." That's a very simplistic way of looking at financial planning, and that's what most people did. Even today, we've had prospects come to us with these reports, and we've found them overly simplistic and boilerplate. The difference between one report and your neighbor's report is probably minimal; there's nothing personalized about it.
Personalized Wealth Management
At Highland Financial Advisors, we believe in providing value through personalized wealth management, and that's the feedback we get from our clients. If you've ever put together a jigsaw puzzle, you know the most important part is the cover on the box showing the finished puzzle. Without that in mind, it's hard to identify how pieces fit together to get that result. That's what financial planning is. If the advisor you're with is not spending time understanding and helping you discover the life calling to you through a series of questions and conversations, that's a critical fundamental part. We call it the part of financial planning that's built around a vision for your future.
The Importance of Vision
There's a quote from the Bible that says, "Without a vision, the people will perish." You can think of Moses leading the Israelites for 40 years through the desert, constantly reminding them of the land of milk and honey. That vision kept them going for 40 years. It's the same with financial planning; without a vision for the future, you're bound to make bad decisions today. By filtering every decision through that vision, many people find it easier to adopt their plan, stick to it, and make good decisions. Where you find yourself today is the culmination of thousands of decisions you've made in the past. You can't change that, but you do have the power within you to start making decisions today that will build the future you want. We don't want anyone to live with regrets, and it starts with that conversation.
Conclusion
So, that wraps it up today, talking about goal setting. I want to highlight the importance of really getting into the qualitative aspect of a discovery process to identify goals, as opposed to a quantitative data-gathering sheet where you just answer some questions with nothing relative to your life. We've found that people want to connect to goals, not just numbers.
Subscribe and Learn More
Again, I really appreciate you watching this video. If you'd like to click the subscribe button below or go to our website at HighlandPlanning.com, we always offer a free phone call or initial consultation, which you can schedule right on the website. This was an introduction to goals. Watch for the next video, where we'll go deep into the questions we ask to really explore and discover the life calling for you. These questions are not ours; they're copyrighted by George Kinder, the father of financial life planning and leader of the Kinder Institute of Life Planning. We're authorized to use these, and I'll share how you can use them in your planning process, whether with an advisor or as a couple.
Thank you for tuning in!