Question 1: What can professional, objective, fee-only, fiduciary financial planning and investment management do for me?
Question 2: Why can't I do my own financial planning and asset management? What resources can help me?
Question 3: What should I consider in choosing a financial advisor?
Question 4: Why should I select Lighthouse Financial Planning, LLC as my financial planner and investment advisor?
Question 5: What is the financial planning process?
Question 6: How much will it cost?
Question 7: What if I still have other questions?
OUR ANSWERS
Question 1: What can professional, objective, fee-only, fiduciary financial planning and investment management do for me?
Setting and meeting financial goals and addressing financial issues is a significant challenge. Invariably, individuals who contact us need additional direction in their financial planning or investment strategies. Many are expecting a transition in their life that affects their financial situation. Some typical shortcomings or issues include:
Failing to save enough for retirement, including optimizing contributions to and investments in retirement plans such as a 401(k), 403(b) or TSP employer plan or IRAs.
Having an assortment of investments, often located with high cost providers, without a coherent investment plan or clear idea if they are saving enough to meet their goals.
Inadequately managing transitions, such as marriage, having children, saving for college, purchasing a home, divorce, becoming widowed, inheritances, and retirement.
Failing to address contingencies that could derail plans, such as inflation, taxes, mismanaged cash flow, job loss or changes in health status.
Competent, objective planning can help to address these issues, producing tangible and intangible benefits that far exceed the cost. For example, just investing in low- fee no-load mutual funds or index funds can often save 1% or more in investment costs, resulting in significant additional asset accumulation over time. In addition clients gain peace of mind that their financial situation is under control.
Question 2: Why can't I do my own financial planning and asset management? What resources can help me?
The reality is that most Americans do undertake their own financial planning and asset management without the assistance of a professional advisor. However, as noted above, this often leads to gaps or shortcomings that produce disappointing results. Truthfully, there is a lot of complexity in this area and it requires knowledge and time to do it right.
Most people simply can't be expected to be expert in all of these areas any more than they can be expert in medical diagnosis or taxes. Even if they are interested and try to stay informed, they are unable to devote the time needed to stay abreast. Many of those who are making a sincere effort are likely to make investment mistakes that are costly, often overreacting to ups and downs of the market, trying to pick winning stocks, and trading frequently. Therefore, as many studies have shown, the returns of average investor are often far below the performance of the market.
Beyond investing, the issues mentioned in Question 1 are some of the critical elements in your financial life that a professional advisor can help you address. In the end, the cost of professional help may be returned many times over. Lighthouse Financial Planning, LLC, is prepared to help individuals avoid mistakes and achieve those important financial goals. We offer engagement options ranging from quick check-ups to comprehensive planning and asset management.
For those who want to increase their personal knowledge, we have listed below for your information links to some tools and resources that may be helpful. Lighthouse Financial Planning, LLC uses most of these in its practice. These citations are not meant as endorsement or as a complete list for your unsupported use. Without adequate training and experience, the information provided may be misapplied.
For modeling different planning scenarios, Lighthouse Financial usually uses Money Tree Software.
For determining your risk tolerance, Lighthouse Financial often uses Finametrica's instrument. For educational information on investing, and ratings of mutual funds Morningstar offers a valuable resource.
For educational information from a publicly available mutual fund family with a broad array of low cost funds try Vanguard.
For insights into investing, explore Dimensional Fund Advisors'investment library.
For information on how you can provide emergency access to your Health Care Directives check out the services of Docubank.
Again, while most individuals go through life without a professional financial advisor, it is our belief that Lighthouse Financial Planning, LLC's services will be a very cost-beneficial approach for most. Contact us to see how we can be of specific help to you or for suggestions on additional public resources and financial calculators.
Question 3: What should I consider in choosing a financial planner?
Thousands of individuals and companies hold themselves out to prospective clients such as you. They call themselves financial counselors, financial advisors, financial planners, senior specialists, investment advisors, investment specialists, trusted representatives, etc. How do you find the right financial planner and investment advisor from among the multitude of competing providers?
It is important that you find someone who is trained and certified with qualifications necessary to offer financial planning. Some titles that are used have few or no educational or experience requirements behind them. It is also important to know what rewards the person or firm receives for their recommendations to you. A person who sells a type of product is likely to recommend that product because that is how they and their firm make money. Make sure they disclose and you understand the specific compensation or the incentives they have for recommending one action, investment or insurance product over another.
A Certified Financial Planner™(CFP®) must meet stringent educational and experience requirements in order to be certified by a National Board of Standards and must adhere to a stringent code of ethics. A member of the National Association of Personal Financial Advisors (NAPFA) operates on a fee-only, fiduciary basis, free of the conflicts that can arise from commissions associated with recommending particular investments, insurance or other products. A fiduciary is a person or organization that owes to another the duties of good faith, trust, confidence and candor. Simply put, it means putting your interests first, without the influence of outside interests. Lighthouse Financial Planning, LLC,s principal is a CFP® and is an associate member of NAPFA.
Question 4: Why should I select Lighthouse Financial Planning, LLC as my financial planner and investment advisor?
Lighthouse Financial Planning, LLC,s principal is a Certified Financial Planner™. As an associate member of NAPFA, LFP operates on a fee-only basis and complies with NAPFA’s fiduciary oath.
Among the relatively small pool of fiduciary financial planners, LFP prides itself on the personal attention it provides its clients. We also focus on educating our clients, and integrating them into the financial planning process to help ensure that they meet their goals. LFP tries to serve as a "general financial manager" encouraging implementation and maintenance of each client's plan. We provide advice, expertise, experience, education, discipline and a process -- critical inputs that can not easily be acquired on one's own.
LFP can either advise you on how to allocate your investments, or can manage your investments for you (on a discretionary or non-discretionary basis) as agreed in your investment plan. Our investment approach is grounded in accepted academic research. We recognize that returns are closely tied to risk and that appropriate asset allocation, broad diversification and low fees are critical to success. LFP does not attempt to time the market or try to predict the future. We are not short term traders. We believe that sound, prudent, disciplined, long-term investment guided by a financial plan provides our clients with the best chance of realizing their goals.
Where necessary, LFP will draw on specialized planning expertise outside of its own organization. LFP can help clients identify possible options for other firms or professionals to support plan implementation and then assist in evaluating the various options.
We believe that every client is unique. Whether you are well on your way to financial security or just starting out with a saving and investment plan, LFP can help you address the financial issues in your life. Whether you are knowledgeable and simply want additional guidance or an individual overwhelmed by the complexity of financial issues, we view the financial planning process as a joint effort of LFP and you, our client. This means that we must be partners in the process. We ask you to inform us of your financial situation, your goals, thinking, needs and concerns. If you are motivated, open to new information and ready to take action, contact LFP to learn how we can help you.
Question 5: What is the financial planning process?
Lighthouse Financial Planning, LLC follows a broadly accepted financial planning process established by the CFP Board of Standards. This usually includes:
Define the client-planner relationship. We want to meet you, make sure our services can meet your needs and establish a written agreement.
Monitor the implementation. We discuss our role and yours in monitoring the implementation and a process for changing recommendations if circumstances change.
Implement the recommendations. We discuss how the recommendations should be carried out, and agree on your role, our role and the roles of other professionals such as attorneys or accountants.
Develop and present recommendations. We develop customized recommendations tailored to your circumstances and goals, explain them, listen to your concerns and adjust them, as necessary.
Analyze and evaluate your financial status. We evaluate your financial situation including your assets, liabilities, cash flow, insurance coverage, investments and taxes and then determine what you must do to meet your goals.
Gather data. We need to gather data on your financial situation, your goals, time frame and your risk tolerance.
Question 6: How much will it cost?
The primary, standard services of Lighthouse Financial Planning, LLC are:
1. Initial Financial Planning Engagement Service: Over multiple meetings LFP develops, with you, a financial plan addressing as requested: net worth and cash flow, risk management (insurance), retirement planning, estate planning, college funding, tax planning, and an investment plan. Service includes limited implementation support.
2. Ongoing Investment Management and/or Ongoing Financial Planning Engagement Service: This service involves as appropriate: periodic meetings/communications to review your financial plan and investment progress, financial plan implementation support, consultation on new financial issues as they arise and, if elected, ongoing asset management.
LFP is also committed to serving individuals just starting out or with limited resources or planning needs. To accomplish this we provide project or hourly engagement options.
LFP's fees for its standard services (initial and ongoing services described above) are fixed, pre-negotiated retainer fees based on assets, income and complexity. Lighthouse Fees can be found in its Disclosure Brochure (ADV) which is available on the SEC’s website at www.adviserinfo.sec.gov under LFP’s CRD Number: 124762. We sell no products and receive no commissions.
LFP's mission is to be your trusted advisor for the long term. We strive to accomplish this by providing the education, service and advice necessary to give you the confidence that you are on the right financial path to your goals and dreams through both good and difficult financial periods. We encourage clients to start out with an initial Financial Planning Engagement because of the many benefits of a complete financial review and so that our ongoing relationship can be built on a solid foundation that has holistically considered your goals, risks and risk tolerance, and financial resources and obligations.
We are confident that no matter what a client's situation, he or she will find significant value in our services, and we invite you to contact us to discuss your specific situation. More information on LFP's fee structure and approach can be found in Lighthouse’s Disclosure Brochure (see above for source).
LFP provides specific advice and charges fees only under the auspices of a written engagement agreement. Clients are never locked into a long-term commitment with LFP. Clients may end their engagement agreement at any time, but we are confident that the value of our services will ensure the continuity of our relationships. LFP treats all client information as confidential, so there is no cost or risk for you to explore the value of selecting LFP as your personal financial advisor.
Question 7: What if I still have questions?
Time permitting and if possible, we are happy to answer any questions you may have. Please go to our contact form. In the comment box please ask your questions or let us know how and when you would like us to contact you.