Frequently Asked Questions
What is comprehensive financial planning?
A comprehensive financial planning approach considers all areas of your financial situation in the formation your personal strategy. If you do not consider all aspects of the plan, one area may be adversely affected by isolated decisions, thus leaving you with an undesired result. For example, when reviewing your asset allocation strategy, you must consider the income tax consequences of changes made in the investment accounts. As specialists in Financial Planning for Doctors and Dentists, we are well positioned to offer a comprehensive strategy to any situation.
What should I expect from a financial planning relationship?
Your advisor should work with you to create a customized financial strategy after the identification of your financial goals. The strategy should address all of the unique aspects of your financial situation.
A quality advisor will assist you with the implementation of the strategy. Additionally, your advisor should have a structured on-going client communication protocol to assure that your plan is periodically reviewed, allowing adjustments to be made as your financial situation changes.
Why is Fee-Only important?
Independence and objectivity. Advisors that are dependent upon product sales and commissions for compensation have a greater likelihood of conflicts of interest. Working with Fee Only Financial Planners gives clients peace of mind since the advisors don’t stand to gain financially from their recommendations.
As fee-only planners receive no monetary gain from the implementation of their recommendations, they can independently and objectively advise clients. Independent fee-only advisors are not tied to proprietary financial products, but can guide clients to the most appropriate solution.
What questions should I ask when interviewing a financial advisor?
- Educational background?
- Financial planning certifications and designations?
- How long have they been in the business, with what firms?
- Will they provide client referrals?
- Are they in good standing with regulatory bodies, any disciplinary actions?
- Which advisor will provide the actual client consulting?
- How is the advisor/firm compensated?
- Do they sell financial products or receive “12b-1” fees or “trailers” on investments?
- Do they provide a written analysis of the financial situation with recommendations?
- Do they assist in the implementation of the plan?
What must a client expect to contribute to the relationship?
We expect clients to significantly contribute to the financial planning process. Clients should be willing to provide all of the background information required for the advisor to prepare thorough recommendations. Clients should have an open mind with regard to financial concepts, such as savings and debt. Be ready to discuss new financial philosophies. Clients should be open and honest about their personal values, goals, concerns and preferences. An advisor can only assist a client after understanding the complete picture.
How is the financial strategy implemented if PFM is fee-only and does not sell products?
We provide specific recommendations for the implementation of the financial plan and consider ourselves your personal financial manager. We encourage you to use your current service providers including insurance agents, tax preparers, and accountants to implement that plan as long as they are able to work as part of the team. Additionally, we can independently direct you to other professional providers who we know and trust such as a mortgage professionals, estate planning attorneys, tax professionals, etc. We will coordinate the efforts of your financial team for the successful implementation of the plan.
Are there minimum requirements to become a client of PFM, such as net worth or investment assets?
No, there are no minimums for service. We believe everyone that wants to begin the financial planning process should have access to quality financial advice. Our fee-only structure allows us to scale the services to the complexity of each individual client.
Do I pay for the first interview?
As a Dallas Financial Planner, centrally located within the U.S, Parkhurst Financial Management CFP is able to assist clients nationwide because of our central time zone placement. We provide a complimentary hour meeting to talk about your needs for financial planning services. During this interview we assess our ability to help you and explain how the process would work for you.
Can I do this on my own?
Do you need professional help in order to design and stick to an effective financial plan? This depends on your unique personal situation and dedication to learning and following key issues. Most find they are better off seeking the information, expertise, experience, and discipline provided by a financial advisor.
Making quality financial decisions requires a high level of commitment to learning and research. Whether you are concerned with an asset allocation strategy, planning for retirement, paying for college expenses, or other financial goal, we believed you are better served by leveraging the experience and expertise of professionals who have dedicated their careers to serving these needs.