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Dec 17 2012 12:00AM


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I’m interested in financial planning but I’m not sure of the scope of a financial planner. My priorities are reducing my personal debt, planning for retirement and planning to support an aging parent. Would a financial planner design a debt-reduction budget as well as a long-term financial plan?


I applaud your initiative to get your finances in order and begin putting a plan in place to reach your goals. It can seem like a daunting task, but like anything else, when you break it down and get it on paper, it is very doable. 

Because I am not aware of your level of debt or whether you have investable assets, I am speaking in generalities. It sounds like you need a plan and you need advice. You may not need to talk about specific investment vehicles. If you have debt I am assuming you would pay it first before investing with an adviser. Most individuals who focus on planning, charge a fixed fee or an hourly rate. You can use FPA PlannerSearch® to connect with a planner in your area based on popular search criteria including specialties, how planners are paid, initial free consultations, and much more.

A financial planning professional should explain to you the scope of their services in the first meeting or on the phone.  Unless the planning is being offered through a non-profit organization or another pro-bono source, you will want to make sure you work with someone who is a CERTIFIED FINANCIAL PLANNER™. Often they will have this mark, CFP®, behind their name. Again, you can locate CFP® professionals who are also FPA members via FPA PlannerSearch.  

These are the six steps in financial planning:

  1. Establishing and defining the client-planner relationship.
  2. Gathering client data, including goals.
  3. Analyzing and evaluating your financial status.
  4. Developing and presenting financial planning recommendations and/or alternatives.
  5. Implementing the financial planning recommendations.
  6. Monitoring the financial planning recommendations.

A comprehensive plan usually involves a review of all of your assets and liabilities (your balance sheet), your cash flow, which in your case should also address budgeting to pay off debt, a review of current insurance coverage for real property and personal health and life, tax, retirement planning, estate planning (a will and ancillary documents), and investment analysis. The planner doesn’t draft legal documents and you usually by any needed insurance or investments from your respective brokers.

From time to time, local FPA chapters are involved in clinics or workshops that offer community residents free, unbiased, financial advice. You can check with your local FPA to see if there are any upcoming events.  


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