University of Wisconsin - Extension

MADISON, Wis: "Having a financial team is more important than ever before," says Michael Gutter, University of Wisconsin-Extension family financial education specialist. "In the wake of recent scandals, and with the level of complexity and interdependence of the decisions we need to make, planning for your family's financial future requires input from more than one advisor. It will take a team approach to help you sort through all you'll need to know about rollovers, whether to annuitize or not, asset allocations and estate planning, and more."

There are many investment services available for financial planning: individual retirement accounts with tax-advantaged savings; brokerage accounts for trading stocks, bonds and funds; and insurance policies for life, disability, long term care, property and auto.

This gives you a lot of control, but can also raise many questions. You may ask yourself: How will I know if I'm doing it right; How do I pick investments; and How do I know how much to save? And whom do I turn to for help? ¿a CPA, credit counselor, attorney, broker/dealer, financial advisor, personal banker or financial planner?

"The first step," Gutter says, "is to see someone who has the knowledge and knows the rules; who can see the big picture and be objective, who can devote the time necessary; and who has experience helping people solve their problems. In short, start with a financial planner."

A financial planner will work with the rest of your financial team to ensure your financial security and stability. He or she is the consultant who will know your family's financial big picture. The others will focus on specific actions. The planner considers everything when formulating the plan, and then brings in specialists to help implement the plan

Gutter says there are ten questions you should ask before hiring a financial planner:

• What experience do you have?

• What are your qualifications?

• What services do you offer?

• What is your approach to financial planning?

• Will you be the only person working with me?

• How will I pay for your services?

• How much do you typically charge?

• Could anyone besides me benefit from your recommendations?

• Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career?

• Can I have it in writing?

There are many benefits to working with a financial planner, Gutter says. They can integrate your financial mission, goals and objectives into one cohesive plan. They can identify risk exposures, establish measurable goals and expectations and help you develop a better awareness of your financial choices and how the internal and external environments affect those choices. A financial planner can also help you deal with reality and let go of "pie in the sky" ideas and wishful thinking. He or she can bring financial order and discipline to your approach, instill confidence that your personal financial goals will be achieved, and identify the changes and behaviors necessary to accomplish your financial goals.

Other members of your team might include:

• A registered investment advisor to execute investment transactions on your behalf and plan the composition of your portfolio.

• A chartered life underwriter for your life insurance policy.

• An additional insurance advisor for other policies such as long-term care, health, property, auto and liability.

• A licensed attorney for estate planning, including wills and trusts.

• A CPA for income taxes and business oversight.

You may also want to have Internet access and personal finance software for communicating with the team and checking up on your accounts.

For more information on finding a financial planner, visit these web sites:

• Financial Planning Association at www.fpanet.org

• National Association of Personal Financial Advisors (fee-only planners) at http://www.napfa.org/

• CFP Board of Standards at http://www.cfp-board.org , or call 1888-CFP-MARK.

The UW-Extension publication, "Family Estate Planning in Wisconsin" (B1442) contains information on choosing a lawyer and selecting a financial advisory team. This and other publications are available from your county UW-Extension office or from Cooperative Extension Publications (877-947-7827) and online at http://cecommerce.uwex.edu/ .