More Knowledge More Wealth Ep. 207 - The Functions of a Financial Planner

[00:00:00] Good day. This is Gabriel Shane, Certified Financial Planner, and your host of More Knowledge, More Wealth, here on every weekend talking about all important topics of personal finance. My goal is to go over the knowledge you need to increase your wealth. Now, to the listener, you can always reach out to myself or any one of my colleagues here at Falcon Moth Planning.

[00:00:55] Our phone number is 855 963 2526.

[00:01:01] Or visit our website at falconwealthplanning. com. That's falconwp. com for short. And you can always ask a question, just send it to radio at falconwp. com, whether it's an audio or just a text email that you want to send over at radio at falconwp. com for short. And you can get any one of these episodes or any one of our previous episodes as well through Spotify, podcasts, and so on.

[00:01:24] And we've got a fantastic YouTube channel. It's been getting a lot of hits here. Now folks, I am the president of Faulkman Wealth Planning. We are a fee only, non commissioned, true fiduciary, folks. And we talk about all important topics of personal finance. Something as simple as where you are today, how retirement looks like.

[00:01:40] Talk about investments, estate planning, insurance, tax planning. Anything that involves the dollar sign, we can help you with, folks. And we are offering 1 2 meetings, 1 2 hours. Of our time at no cost folks give us a call We would love to help and it doesn't matter where you are. We help all across the country We have offices all over we would love to help our phone numbers eight five five nine six three 25 That's 855 96 Falcon.

[00:02:09] Like the bird. Folks, I wanted to spend some time today. I, uh, had the luxury of golfing yesterday. I haven't done that in a really long time. I've only golfed twice so far in 2023, which is, by the way, two times more than I did from 2018 to 2021 combined. So, the point of this is the following, you know, you mingle with people over there, you go with people, your friends, and then you go with colleagues, and then you see people that are in the clubhouse, and you know, they try to spark conversation, they ask, what do you do?

[00:02:41] Somebody asked me, what do I do? I said, you know, it's funny, I used to say financial advisor, and then people would take like two steps back, like, oh, whoa, like, I have a disease or something, like, whoa, whoa, whoa. I manage my own money, by the way, like, it's funny. Now I'm like, what do I do? I help people in their financial situation, achieve their, their goals.

[00:03:03] We manage money. We do wealth management. We save in taxes. Sometimes if somebody's trying to come off pompous, like they have a lot of money. I'm like, well, I help rich people get richer. If not, you know, I sometimes even say that, but I say we even help the aspiring become rich. My point is, or financially strong or independent, whatever the case is, whatever their goal is.

[00:03:22] My comment to that is, it's funny how some people are like, they're very proud by the fact when they say, you know, I do it on my own, I don't have an advisor. And I'm proud of them to do that. But it's funny how sometimes they think just putting their money in a target date 2030 fund Is the answer to all their financial solutions.

[00:03:41] It was really designed, especially back when, when the average account size was probably less than 50, 000. And heck, majority of Americans over the age of 50 years old has a retirement account under 150, 000. Now, and we're not saying anything bad about that. Outside of the fact is putting your money into one fund, one target date fund that only rock reconstitutes maybe once or twice a year.

[00:04:07] It doesn't make that much sense. You have to take a look at your situation and what makes a lot of sense for you. Putting your money into an investment fund, sure, that could be 80 percent of your investment goal, but the other 20 percent matters. It's the 80 20 rule, right? 20 percent of your Clients bring 80 percent of the revenue with that 20 percent that you're missing may give 80 percent of the value of your portfolio and people miss that folks.

[00:04:36] And it's unfortunate, but it's funny how they're like proud to be like, Oh, essentially they're saying, I don't need you. So I thought I would put together a list of a handful of reasons why it could make sense to work with a financial advisor, financial planner. And by the way. Don't ever ask me if you should have a financial planner.

[00:04:56] Obviously I'm going to say yes. I'm the most biased person you can ask if you should have a financial planner. Of course you should. Don't ask a financial planner if they should have a financial planner. No duh you should. Everybody should have a partnership with money and finance. Run things by it.

[00:05:13] Making sure you're not making mistakes in your financial investment tax situation. Obviously I'm going to say you should. But the point is, is how much value are you putting outside of just investments? And most people do not. I'm going to go over a handful of different things and even explain of things that you should be doing and taking a look out for.

[00:05:38] And I'm going to put them in something in certain categories. And I'm going to talk about cash management, debt management, education planning, um, go over investment planning, tax planning, retirement planning, insurance planning, and estate planning. And even the psychology of financial planning. So I'm going to go over all of those options for you and talk about everything that you should be doing.

[00:06:01] And taking into consideration, by the way, folks, if you're just joining me, you're listening to Gabriel Shaheen, certified financial planner and your host, more knowledge, more wealth here on every weekend, talking about all important topics of personal finance. So today we're going to talk about the value of financial planning.

[00:06:20] And when you want to evaluate, are you working with a good financial planner? You guys see if you're getting all of these offerings. So cashflow management is important. You can align your spending with values and goals. You can allocate bucketing cash by your goal even. And you can even take a look at analysis of changing jobs or salary.

[00:06:39] Like you should be able to run this by your advisor. Analysis of ways to provide financial support for your adult children, or even your aging parents. Maybe looking at buying a car versus leasing car, maybe a. Divorce Cash Flow Analysis, Emergency Fund Planning, Expense Analysis to Find Forgotten and Unneeded Expenses, Home Buying vs.

[00:07:00] Renting Analysis, Optimizing Return on Cash Flow, Planning for a Sabbatical, some people like Living as a Nomad, Planning for an International Move, Review of Personal Credit Cards and Rewards Program, Setting Cash Balance Targets, and Vacation Home planning. That's just for cash flow management. A lot of people miss out on these.

[00:07:24] So you're saying like, yeah, you could do it on your own, but what is your subject area of expertise here? Like, I'm curious if even advisors have that, especially like sole practitioners. You, there's no way in heck you can be a fantastic expert in all of those areas in cash flow management alone. I mean, someone like myself, some people say, who gives you the right to judge who's good and who's not?

[00:07:50] I mean, you know, I just look at a few awards of the many that we've gotten. Something as RA Intel says, top. Firm in the country. One of the top firm wealth management says top financial advisor in the country. I mean, thank you very much. Investopedia. We all know this media. I was recognized as one of the 100 most influential people in finance.

[00:08:07] Heck people, investment advisories, uh, magazine says a thought leader in the industry. So we've got industry people saying that Falcon Wealth planning and myself are elite. So I think hearing from somebody with street credibility is valuable. Now let's continue the conversation on debt management. You can create a tool with your total debt payoff plan, debt payment allocation, federal student loan analysis, planning, and using the IDRs or.

[00:08:37] PSLFs as well for that. HELOC analysis, home mortgage refinance analysis, inter family loan planning, mortgage comparison analysis from buying a home, refinance credit card debt, refinancing student loan debt, reverse mortgage analysis, 529, let's go to education planning a little bit, 529, uh, planning, uh, discussion of college financial aids, the merit, need base, strategy, funding strategy with 529s, UTMAs, taxable accounts, Roths, IRAs, and support filing, uh, filling out the FAFSA form as well.

[00:09:13] And these are the things yet again, people just don't look into. I'll take it a step further on investment planning. Are they looking at the asset allocation analysis and what people often forget is the analysis side of it. How about asset location? Where do you invest and what do you invest in each type of account that you may have?

[00:09:32] And adjusting accordingly. How about creating an investment policy statement for yourself? All this you can be DIY for but are you doing these things? It's crucial. Employee Stock Purchase Plan Analysis. Handling Concentrated Stack Position. Making sure you're not overweighted in that situation. How to Invest in Inheritance and Windfalls.

[00:09:50] Moving to Lower Cost Investments. Paying Off Margin Interest Balances. Rebalancing Execution. Uh, and then you can even go into details of Rental Real Estate Analysis as an investment. And then Withdrawal Strategy. Guys. The thing is, everybody knows the core competencies in general of financial planning.

[00:10:12] Have more money at the end of the day. Help it grow. But these little nuances, I met an extremely sophisticated individual, read all the Tony Robbins books out there, and he has now a mortgage, and by the way, the house that he's had For, I want to say it was since 2014 and he still has a mortgage at seven and a half percent.

[00:10:31] He never refinanced that home and it was an arm. He just forgot. I mean, sad. He lost 5%, excuse me, 5 percent right? Cause he is paying seven. He could have refinanced it to something. So he could have saved 5 percent on a 700, 000 mortgage. That's 35, 000 a year of interest that he's going to be paying for a while.

[00:10:56] These are the things that I'm talking about, folks. Tax planning is one of our biggest niches at Falcon Wealth. And here are some of the ideas that I wrote down. Adjusting strategies for changing in tax policy. Adjusting tax withholding and allowance. Analyzing options to maximize. QBI deduction. Capital gain harvesting analysis.

[00:11:16] Charitable giving location planning. Donor buys fund, appreciated stock, etc. Curation of tax professionals. Leveraging college tax credits. Reviewing annual tax return. Roth conversion analysis. Standard versus itemized deductions. Stock option planning. Strategies for accelerating deferred business income.

[00:11:34] Tax bracket management. Taxes and gain harvesting as well, depending on your tax record, tax credit analysis, opportunities and tax harvesting analytics guys, there's so much out there that people don't know. And accountants don't do that. Even if you have a tax professional, you meet with them once or twice a year.

[00:11:51] That's a tax preparer, not a tax planner. There is key differences to that. And folks, if you want help with this, this, I'm not even close to being done. I'm going over all the different things that you should be taking a look at. When deciding to hire planner, if you want help with this, we can help. We can offer one to two meetings, one to two hours of our time.

[00:12:10] Folks at no cost. Our phone number is 8 5 5 9 6 That's 8 5 5 96 Falcon. Like the bird or visit our website at falconwealthplanning. com. That's falconwp. com for short. Folks, we're going to go on a quick break. When we come back, we're going to talk a lot more about planning opportunities.

[00:12:33] Welcome back, folks. This is Gabriel Sheen, Certified Financial Planner and your host for more knowledge. More wealth here on every weekend talking about all important topics of personal finance. And today I was talking about how I went golfing over the weekend, and I was going, uh, yesterday to be exact and going over how I had an interaction with somebody saying, Whoa, you're a financial advisor.

[00:13:39] Leave me alone. It was quite comical if you ask me, but the point is, it's like, what do they not know? What do they know that they don't know? And so on and so forth. And it's like, I'm just highlighting all the different things that a financial planner should be offering you now. Not all financial advisors do that.

[00:13:54] Some people are investment focused and that's all they do. And so now here at Falcon Wealth, we are fee only, which means we have access to the whole universe of investing out there. Now, we prefer standard asset allocation model with heavy tilts, but globally diversified portfolio is going to be important, folks.

[00:14:14] And there are certain tilts, especially in fixed income, that you should be doing in a rising interest rate environment. But that's not the point. The point is, is there is more. To your situation than just investments. Quite frankly, when you're a fee only and you're not limited by a broker dealer, you have an unlimited investment offering.

[00:14:31] So that's yes, we do fantastic that for that reason, but that is not the goal. Now the goal is to go over. Now, I've already discussed, uh, general financial planning, uh, so I've gone over those, whether it's debt management, education planning, or cash flow, investment planning, and tax planning. I still want to talk to you about retirement planning, insurance planning, and estate planning, and also the psychology of financial planning.

[00:14:56] So, with retirement planning, here are the things. You have to ask. Analysis of how much to contribute to your retirement accounts each year. Analysis if you should be doing Roth versus traditional. Consider backdoor or mega backdoor Roth IRAs. If you don't know what that is, you know, if you don't know, now you know.

[00:15:16] And so, uh, coordinating income and tax sensitive items. Something as simple as Medicare premiums. Define benefit pension analysis. Determine when clients can retire. Helping clients avoid financial frauds. planning for housing transition, retirement cashflow analysis, retirement lifestyle, uh, goal planning, retirement plan distribution option, review annual social security statements, RMD planning, uh, safe withdrawal rate analysis, retirement age strategies and social security claiming analysis with, Oh, by the way, a ridiculous amount.

[00:15:55] Of social security strategies. There's over 526 strategies that are available out there and which ones make sense for you. And even if it makes sense today, it could change with the passing of a spouse and so on, or even, uh, an ex spouse, believe it or not. So, yet again, there is just so much out there and it's crazy when I go over this and I have a lot of financial professionals that listen to the show, like, wow, that's a lot of stuff to go over.

[00:16:23] And it is, but having a process to capture it all and to go over everything, but these aren't done in one or two meetings or five meetings or even 10, 20. 30 plus years. Things have to be analyzed as they come, and there's times you bring things up to the attention. And so we cut in front and address those as necessary.

[00:16:48] Now, let's look at insurance planning. Something as simple as looking over current insurance policies. Curation of insurance analysis. Disability insurance analysis. Looking at high deductible plans with HSA for low deductible health insurance analysis. Home insurance. Uh, life insurance, long term care, Medicare, uh, review your auto insurance, looking at umbrella coverages and workplace open enrollment benefits.

[00:17:17] People don't look into all the insurance needs that you may have looking at, like they were saying, healthcare. Auto home life insurance needs not trying to sell a life insurance product like these index universal lives that are often misrepresented. You know what that means when the rep misrepresented, which by the way, a lot of state regulators highlight how it's often they say, beware, watch out.

[00:17:46] It's often misrepresented of how those work. They're sold as an insurance where in reality that's not the case. You know what I say when something's misrepresented, you're being lied to. And if you have something like that, it's okay, there's still opportunities to get out of it. All I'm saying is be careful.

[00:18:04] I want to talk about the next piece of this. What else can a financial planner help with? Let's look at estate planning, business succession plan, federal estate tax planning, funding of trust, retitling of assets, gift planning, guidance on creating and reviewing. Advanced directives, healthcare proxies, power of attorneys, wills, guidance on prenuptial agreements, recommendations and curations of a state attorney, review, bequest planning, uh, review, potential trust options, state, estate tax planning analysis.

[00:18:40] Each state is different here. Where our headquarters in, in Southern California, there is no estate tax versus you got somebody in Illinois. They might want to retire or spend the latter years in Wisconsin. Because Illinois has estate taxes up to 16 percent where Wisconsin has nothing. And then of course, surviving spouse analysis after death.

[00:19:03] I know this with my mother being a widow at 48 years old. So the idea of this is that Number one, you might be talking to somebody who studied this, but are you talking to us about somebody who lived through it? It's crazy how I used to never talk about my father passing away. And now I realized it's part of what makes me a fantastic advisor.

[00:19:21] I'm able to be empathetic. I could be in those shoes. I was at my father's deathbed when he passed away. And so these are things that make you stronger. You take the weaknesses, the thing that you feel weak when you get emotional thinking about, and it makes you a stronger person and better person and a better advisor.

[00:19:38] Because you can relate to these things. I think the point of financial planning is the financial side of it. Right? Personal finance is more personal than finance. A lot of people miss that. It's easy to forget. It's easy to miss. By the way, folks, if you're just joining me, you're listening to Gabriel Shaheen, certified financial planner and your host of more knowledge, more wealth here on every weekend, talking about all important topics of personal finance.

[00:20:02] And today I'm just talking about the simple concept of putting your money to work more than just investments, putting your money to work with your brain. By looking at all the different other analysis that's out there. So we talked about estate planning, and here's the thing. When you look at the psychology of financial planning, you can develop and envision financial and life goals, financial coaching of implementation to have better just habits and looking at money differently.

[00:20:31] Identifying money scripts, offering peace of mind of tracking financial, uh, life and advice, support overcoming financial biases, support overwhelming the investment behavior gap. This was a Nobel Prize given to 16 by Thatcher on, uh, behavioral finance. What's my point with all this, folks? By the way, that was over 100 items I went over with you in about 10 15 minutes.

[00:20:58] It's to make you better. Now what you're doing found out more. There's a, from a lot of the comments and subscribers, there's mostly advisors that actually listen to the show. And I'm proud to say that I am. That's probably validating the investopedia 100 and my recipient of that award this past year. I want to be able to help everybody.

[00:21:18] I don't look at them as competitors. I look at them as colleagues. We don't look at our prospects or clients as clients. We look at them as people. We are in the people serving business. And we try to be the best at it. So much so where our colleagues look to us for help and advice. And just knowledge behind it.

[00:21:37] So a lot of the strategies that we go over is to help everybody. And if somebody else can learn from what we're saying to help you, then great. My point to you is, we are fee only. Work with a fee only advisory firm. Guys, there are fantastic fee based advisors out there. There could be some good commission based advisors out there.

[00:21:57] I work, I have a cohort of people that I work with, and some of them are fee based and commission based. Nothing's wrong with that. These are good, honest people out there, but the problem is there are some people within their same organization that are not as good and warm hearted and care about you. And it's easy to be influenced and dangle the carrot with somebody that's offering you, let's just say a 10 percent commission versus a 1 percent commission.

[00:22:22] Even if they're a good person, they may have conflicts of interest to justify the 10 percent commission versus a 1%. Now imagine if the commission's 20%. Think about that. You have to do 20 times more work to get the same amount of commission. This is why this industry is tricky and just know who you're working with.

[00:22:41] I say work with a true fiduciary. Some people hold the CFP designation like myself. Now the CFP designation says you have to do it's in the best interest. You have to be a fiduciary and that's true, but who are you fiduciary for? Who are you supposed to look out for? Because if you don't hit numbers, your employer could let you go and fire you.

[00:23:01] So it gets a bit sticky. So do you work for a commission based firm? That where you eat what you kill? Do you work for a fee based firm that has a little of everything? Yes, there's commissions involved, but they also have a fiduciary standard, but they don't have to fully tell you every time they take off that fiduciary hat and they can start selling annuities or insurance products or fee only where 100 percent of the time they have to do what's in your best interest.

[00:23:25] That's why I said Falcon wealth created our type of model. We don't make as much as the other guys. We don't, but we grow on volume. This is why we have almost 20 advisors. We've got five more sitting for the CFP, been in business for eight years now. And we are one of the fastest growing firms in the industry by almost every publication from financial advisor, from city wire, from an advisor magazine.

[00:23:50] And we're blessed to be in that category. But we do it from honest work. We work hard and we're extremely knowledgeable in what we do. This is why we're offering a free financial assessment to help relate this show to your specific situation. Folks, give us a call. We'll give you one to two meetings, one to two hours of our time at no cost.

[00:24:10] Our phone number is 855 963 2525. That's 855 96 Falcon, like the bird, or visit our website at falconwealthplanning. com. That's falcon, WP. com for short. We would love to help you with your goals, your situation, answer the questions that you. Whew. Folks, that was a fast, fast show. I want to thank you for tuning in with us this weekend.

[00:24:36] Feel free to reach out to myself or any one of our colleagues here at Falcon Wealth Planning. Our phone number is 855 96 Falcon. 963 2526. That's 855 96 Falcon. Like the bird or visit our website at falconwealthplanning. com. That's Falcon, WP. com for short. And you can get this episode and one of our previous episodes as well and visit our YouTube channel as well and subscribe to that and you can get these episodes on podcasts and on Spotify as well.

[00:25:05] And if you have a question you want us to read off on air, please send it to radio at Falcon WP. com. That's radio at Falcon WP. com. Folks, have a fantastic week. Have a great weekend and God bless.