Everyone associates financial planning with investments–stocks, bonds, mutual funds and ETFs. Investing is an important part of our job but real financial planning encompasses so much more than just investment management. As the majority of our Foreign Service and federal government colleagues have never worked with a financial planner, I want to pull back the curtain to show you what we do and how we help people every day.
Financial planning starts with a deep dive into your finances to build a comprehensive plan. Sure, we will look at your investment allocation, risk tolerance and investment timeline, but we also want to talk about your goals and dreams, cash flow, insurance, estate documents, employee benefits, tax diversification and much more. A comprehensive plan is a great way to get organized and take stock of your financial situation but, if your new financial plan is just a one-time project, then it is only a snapshot in time and will almost immediately need to be adjusted for life’s changes–especially for the Foreign Service Officers (FSOs) and Specialists out there.
Our strong belief is that the real magic in working with a financial planner is the ongoing relationship and forming a trusted partnership. We tell our clients we will help you throughout your career and retirement in these main areas – accountability, education, proactivity, organization, partnership and objectivity.
Creating a client relationship that has high trust and high intimacy is transformative for both me and my clients (and too rare in our modern world). And that is why I find financial planning so incredibly fulfilling–my job is simply to help clients live their best lives!
Here are some of the things Logbook has been celebrating and discussing this past week with our clients:
1. Handshakes have gone out and it is exciting for an ex-FSO like myself to hear about my clients’ new assignments all over the world–yes, I’m a little jealous! We have engaged in great conversations about job prospects for a trailing spouse, new pay and allowances, tax projections, and putting money aside for home leave and/or a DC assignment!
2. This week we filed the FAFSA and CSS Profile for two clients’ graduating high school seniors. We have worked together over the last year to develop fantastic prospective school lists, educated these students about student loan debt via a customized webinar and now are waiting on the early action decisions. Once the financial aid letters arrive in March, we will work with our clients as needed to evaluate if they are in a good position to ask for additional financial aid.
3. The job market is hot right now and your federal government and Foreign Service skills are very much in demand. Last week we looked at new job offers for three clients and together, came up with counter offers. We also had deeper discussions about leaving State or CIA and a loss of identity.
4. For a client buying and selling properties at the same time, we talked about the pros and cons of a signature loan against their portfolio as a bridge until their existing property sells. We also weighted bridge financing against more traditional mortgage choices.
5. For one FS-02 Foreign Service family with two children, we mapped out their existing life insurance coverage, FSPS survivor benefits and Social Security benefits year-by-year until full retirement age to very clearly understand if they had adequate life insurance in case of tragedy.
6. On a sadder note, we worked through the financial terms of a marital separation agreement and how to evenly divide assets after a lengthy marriage.
7. For two federal employees, we went over gifting scenarios after a family inheritance was received and discussed how to make required minimum distributions from a beneficiary IRA.
8. A volatile stock market is concerning for everyone, so we understand when clients want to discuss their portfolios and we can offer objective advice to prevent emotional decisions.
This is just a small sample of a financial planner’s weekly workload. Of course, we managed clients’ portfolios and bought and sold investments, but our most important work is just being there to help you navigate any curves that get thrown your way. We do this through an annual financial planning retainer that encourages planning and collaboration any time you are faced with a complex financial decision.
We think all Americans need an ally to help them navigate the complexity and emotion of money and that having a financial planner over the next decade will become as common as having a doctor or dentist. Take some time and find a perfect fit for your own situation.
Be on the lookout for our next article, offering additional tips on how to find the right financial planner for you.