This Is What Good Financial Planners Do

It’s about much more than just helping you with your investments. Here are some things that you should be getting out of your relationship.

Mature businessman presenting project on digital tablet to coworkers in office
(Image credit: © 2014 Thomas M. Barwick INC)

People who are considering working with me sometimes ask, “So, Meg, what do you do, anyway?” Considering how much time I spend doing what I do, and the breadth of the work, I can struggle to boil it down to a few punchy bullet points that will illuminate the mystery quickly.

Nevertheless, it’s a worthwhile question to ask — and have answered.

Why Is It Such a Mystery What Planners Do?

When you are finding a new doctor, you don’t ask her, “So, what do you do, doctor?” Everyone knows what doctors do. Why do so few people know what financial planners do. As I have discussed before, there is:

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  • No minimum training or education necessary to call yourself by that name.
  • No minimum set of competencies we can rely on such a professional to have.
  • A bewildering variety of companies that employ professionals who pitch themselves as financial planners or similar.
  • No easily quantifiable way to judge success.
  • A large trust deficit to overcome.

You Manage Money, Right?

That is the service that has dominated the profession for the last few decades, so it’s no surprise you think that’s what financial planning is.

And while, yes, many planners will invest your money for you, and yes, that’s a useful, valuable service to provide, investing your money is one thing, of many, that a good financial planner does.

The technical aspects of investing have become a commodity. You can get reasonable portfolios simply and inexpensively through stand-alone robo advisers (Betterment or Ellevest, for example) and all-in-one mutual funds (Vanguard’s LifeStrategy funds, for example). Therefore, a financial planner who only “does” money management is likely not worth your while.

Specific Financial Issues a Planner Can Help You With

The easiest way of explaining what I do is to list the financial issues I help clients understand and act on. I focus on women in the tech industry, so this not-remotely-exhaustive list is geared toward that. Ultimately, what a planner does with you depends on your specific situation.

  • Figure out how much of a cash cushion you need, and how and by when you’re going to grow it.
  • Calculate how much to save to your 401(k) and how to invest it.
  • Identify your need for tax planning and help you find an accountant.
  • Answer the questions, “Should I exercise my stock options? When? How many?”
  • Make a plan for your Restricted Stock Units.
  • Figure out what to do with your stockpile of company stock. Sell it? Keep it? Donate it?
  • Create a savings plan that makes progress toward multiple goals: retirement, buying a home, etc.
  • Help you come up with the down payment for a home purchase.
  • Evaluate employee benefits.
  • Evaluate a job offer.

The More Important Stuff

That list above is an easy, but rather simplistic, way of understanding what I do. The real value comes when we get into the “squishier” areas, which are harder to put in a chart.

  • I bring clarity to what might feel like “an abyss of uncertainty,” as a client recently described it. Google will gladly give you more information about personal finance than you can consume in a lifetime. But which ideas are important for you and your family?
  • I help you focus. When you need more life insurance, to roll over some 401(k)s, to invest some extra cash, and to manage the risk of company stock, which should you do first?
  • I help identify when your stated values and priorities aren’t reflected in your financial behavior. If you tell me you want to buy a home but you spend most of your money on travel, then either you need to rethink your goals, or you need to set up a better system to save.
  • I provide you with accountability to help you stick with the plan we make together. Behavioral change is hard, be it your diet, exercise, finances or relationship. I can learn a lot from reading books, but I get stuff done when I work with my business coach.
  • I help you learn about and gain confidence in your own finances. Imagine how you’d feel if you actually understood what was going on and why you’re doing what you’re doing? One of my clients recently celebrated as she announced she’d moved her old 401(k) into her newly established IRA and invested it all by herself. That stuff just can’t be un-taught. Now she is permanently better equipped to understand and handle her finances.
  • I give you “permission” to do the things you want to do or think you should do anyway. Not everything you want to do, of course, but if I don’t think it’ll put your finances at undo risk, I will give my stamp of approval. One of my clients wants to buy a home but doesn’t have enough cash for a down payment. I recommended she stop saving to her retirement account and HSA immediately and funnel all that money into a savings account for a while. She was relieved because she had thought of doing that but wasn’t sure it was the proper thing to do.
  • I listen. Funny how when you start talking about your money, you start talking about every other part of your life. I’m not a mental health counselor, but I can tell you, simply having a trusted expert you can unload all your financial anxieties onto can be worth the price of admission all by itself.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Meg Bartelt, MSFP, CFP®
President, Flow Financial Planning, LLC

Meg Bartelt, CFP®, MSFP, is the president of Flow Financial Planning, LLC, a fee-only virtual firm that provides financial guidance to women in tech. She is a member of the XY Planning Network.