Values-Based Financial Planning

September 1, 2010

Say the word “financial advisor” and take note of the images that appear in your mind:  stockbroker in a skyscraper?  Salesperson behind a desk?  Insurance agent with a coat and tie?  The person who does your taxes?  Someone who sold you a mutual fund?  Perhaps an actor in a television commercial?

Our notions about financial professionals are generally based on the personal experiences we have had with them.  For this reason, one of the first things that I ask of prospective new clients is to share with me the experiences they have had with past advisors.  What this usually leads to is an opportunity to differentiate the types of financial advisors populating the industry, while also providing a chance for clients to express their ideas about the kind of advisor they would like to work with.

Although Registered Investment Advisors (of which I am one) and Registered Representatives of large brokerage firms (which I used to be) are heavily regulated, the practice of financial planning is largely free of institutional oversight.  This is because financial planning is less about what we are and more about what we do.

In short, Registered Investment Advisors who are also financial planning professionals can differentiate themselves quite easily: we are fiduciary advisors, meaning we have an obligation to put the interests of our clients ahead of our own.  In order to appreciate this distinction, it helps to understand that employees of broker-dealer firms typically act under “suitability” guidelines, meaning their only obligation is to recommend what is suitable for the client, even if it also happens to pay them the biggest commission.

So, while there are many licensing bodies and trade organizations that financial planning professionals belong to, the lack of an actual regulatory structure which governs how we define ourselves lends itself to a sort of entrepreneurialism and branding that, as long as we are not running afoul of the Securities and Exchange commission or the National Association of Securities Dealers, is perfectly “kosher.”

This blog, of which this entry is the first, will promote topics which place our firm, Milestone Financial Advisors, within a small niche of fee-only advisors known to ourselves (and our clients) as financial life planners, AKA humanistic financial advisors, AKA holistic financial advisors.  Behind these monikers is the notion that there is more to financial planning than the nuts and bolts tools which seek to answer questions such as “When can I retire?” or, “How much is enough?” or, “How much will I have to save to send my kids (or grandkids) to college?”  Certainly, values-based planners address these issues and utilize these tools, but not before a process of exploration and discovery that seeks to understand our clients most essential life goals.  Without such knowledge, how can we possibly hope to answer these questions when the definitions of “retirement,” “security” and “wealth” and “benevolence” are so individual?

Within this niche, our professional goal is to enhance the quality of our clients lives by creating financial plans that integrate their investments with the broader elements of their lives.  We seek to create a supportive framework for helping identify and prioritize our clients most meaningful financial goals; in short, to help them place their money into alignment with their values.

We hope you will return to this blog for news, insights and information that supports all of the above.

Thanks for reading.

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