Personal Financial Planning and Wealth Management 101

personal financial planning

Introduction

Most people have trouble with their finances, but it doesn’t have to be that way. Whether you want to help others in that situation or you need help yourself, a personal financial planner is something to consider.

Today, you’re going to learn everything necessary about personal financial planners and advisors and when you might need them. We also discuss how to become one, so you can change careers or have the information required to decide if it’s the right job for you.

If you’re already sure you need a personal financial advisor, please click here.

Personal Financial Planning

What Is a Personal Financial Planner?

A personal financial planner is there to take inventory of all your finances. Once they have a good idea of what you’ve got, they can create a plan to get you to your goals. Ultimately, you’ve got to know what you want, such as focusing on retirement or putting the kids through college. 

Most of the personal financial planners also offer investment management.

Typically, you may wonder if you need a personal financial planner because you’ve got friends, family, and the entire internet to help you. However, a personal financial planner cuts through all the noise and information-overload to provide you with expert money advice tailored to your needs.

Why Is Adam Fayed a Good Financial Planner?

Whenever you hire a personal financial planner, you’re looking to make a good match with someone. Adam does things a little differently than some of the other firms out there. He’s very selective about his clients. Ultimately, he feels that he has the right to expect certain things from them, such as honesty about their finances. In essence, he wants you to be focused on your financial goals, think long-term, and be efficient. You should already be trying to do these things, so it’s really just about listening to his advice, questioning him when you don’t understand something, and taking an active role in your financial fitness.

Adam offers three service areas, so you’re likely to fit into one of them. For those who are ultra-wealthy, he can help you figure out how to manage your money when you have more than $1 million. You’re going to learn about wealth management, passports, second residences, and so much more. 

If you’re hoping to get a passive income and accumulate more wealth, you can also use Adam’s services. It requires a $100,000 minimum, so it’s not for everyone. However, those with only about $750 to spare can still invest and take advantage of the benefits of compounding. 

Those who are still unsure might want to consider reviews from other clients who have used Adam’s services. Out of 31 clients, he has received five out of five stars. That’s saying something because most people look for any reason to dock a company or individual!

He can help those in over 100 countries. Therefore, you don’t have to live in the land of the free to utilize his services. 

You’re going to appreciate how active Adam is on social media. He has many followers and puts out easy-to-understand blogs and advice. In fact, his articles have over 10 million readers. Clearly, he knows what’s he’s doing and is giving sound advice for that many people to tune in!

Customer Retention

Customer retention is a huge concern, too. Personal financial advisors need to do everything right to keep their current clients. There’s always room for more financial freedom, so it’s good to know that Adam has a customer retention rate of 94 percent. What that means is that most people who try his services stick with him. What does that mean for you, though? 

It indicates that you’re going to be satisfied with the advice he gives, and you’re going to see improvements over time. Remember, nothing is set in stone, and you’re not obligated to stay his client. However, you’re going to start making progress and move toward financial freedom, which is going to make you see the true and real benefits of working with a personal financial planner. 

Another reason people prefer to work with Adam Fayed is that they see annualized returns of between 8 and 12 percent. For those who don’t know what that means, an annualized return is the average amount a person earns through an investment every year through a given time period. While this is just one part of the picture into how the investment is doing, it’s a good sign. There’s always a chance of price fluctuation and volatility in the markets.

Average annualized returns often stay around 6 percent, so you can quickly see how well Adam does for his clients. It’s about 2 percent more than other companies and individuals can offer, meaning you’re in excellent hands.

If you’re already interested and have the minimum money amounts, now might be a good time to apply to become Adam’s client. Consider reading through the FAQs first to understand why he has such a process. Then, fill the form out. You’re going to be amazed at the personalized service you get, but you’re going to be impressed with the investment options that open up for you. Now is likely the perfect time to apply. 

Those who still aren’t sure can watch videos and read blogs created by Adam’s team. They’re going to steer you in the right direction and give you many things to think about. Ultimately, you’re going to save time and money when you work with Adam Fayed.

How to Be a Good Personal Financial Planner?

Now that you know the educational and work requirements needed to be a personal financial advisor, you need to figure out how to be good at your job. Typically, a personal financial planner requires a specific skill set. This includes:

  • Attention to detail
  • Aptitude for marketing and sales
  • Ability to build strong relationships with clients and be trustworthy
  • Comfortable with analyzing data and numbers
  • Knack for taking complex ideas and simplifying them
  • Ability to talk to various people

What Does a Personal Financial Planner Do?

Most people don’t really understand what a personal financial planner does. It’s important to know what to expect when you hire one, and it can also explain why they’re necessary. In a sense, these professionals help you decide what to do with your money, and that can include investments.

Your personal financial advisor is a planning partner. What happens if you need to retire in 20 years or send your kid to a private college in 10 years? It’s often too hard to figure out what to do on your own. To accomplish all those goals, it’s important to work with a skilled professional with the right licensure to make your plans a reality. 

You and your personal financial planner are going to cover various topics. This includes how much you should be saving, what goals you have, the type of accounts you should get, insurance needs, and estate/tax planning.

Personal financial advisors are also educators. Part of their job is to help you understand what your goals are and what’s involved in obtaining them. The educational process can include help with many financial topics. Often, this starts with saving and budgeting. As you advance, the personal financial advisor can assist with complex investments, tax matters, and insurance needs.

The first step here is to understand your financial health. You can’t plan for your future without knowing what you’ve got today. Generally, the personal financial planner asks you to fill out a written questionnaire. These answers help the professional understand your specific situation.

The Questionnaire

Your personal financial advisor is going to help you take a full picture of the assets, income, liabilities, and expenses you have. On the questionnaire, you indicate future incomes and pensions, as well as your retirement needs and long-term obligations relating to finance. In short, you list what’s going on now and what’s expected in the future.

The investing portion of the questionnaire focuses more on subjective topics, including risk capacity and tolerance. Knowing your risk helps the advisor to determine your asset allocation for investing. This is also the time where you explain your preferences too.

Creating the Plan

Your personal financial planner takes all the information you give them and puts it into a comprehensive plan to serves as your roadmap for financial success. It starts with a summary of the key findings from the questionnaire and summarizes your financial situation, which includes assets, net worth, liquid/working capital, and liabilities. 

This is sure to be a lengthy document that offers insights into estate planning, risk tolerance, family situations, long-term risks, and other things. You’re also going to get a worst-case and best-case scenario about your financial future. 

Now that you know a bit more about what a personal financial advisor does, it’s time to hire one. Please fill out the short form to get started!

Remember, a personal financial planner isn’t just there to help you with investments. It’s their job to help with all areas of your financial life. Therefore, you may never have that person manage your portfolio or recommend investments.

For most people, though, investment advice is a significant reason to hire a personal financial advisor. If you go that route, here’s what to know:

Your personal financial advisor is going to set up asset allocations that fit your risk capacity and tolerance. This is a rubric to find out which percentage of your financial portfolio is going to be distributed across the different classes. Those who don’t like a lot of risk are sure to focus more on CDs (Certificates of Deposit), government bonds, and money market options. However, if you’re more comfortable with risks, consider more stocks and corporate bonds, as well as real estate. 

The asset allocations are adjusted for your age and how long you have until retirement. 

Understanding

You’re the consumer, so you’ve got to understand what the personal financial planner is recommending and why. Don’t just blindly follow what they say. It is primarily your money, so you have to know how it’s being used. Also, focus on the fees you pay to the advisor and funds purchased for you. Always make sure you understand why certain investments are recommended and whether or not the personal financial planner is getting a commission for selling those. This could be considered a conflict of interest.

Generally, financial planning firms choose financial products based on the client’s risk needs. For example, there’s a 50-year-old who has enough for retirement and wants to preserve his capital. They may have about 45 percent tied up in stock assets and 55 percent of it in fixed-income assets. However, you could also have a 40-year-old with a small net worth. They want to take more risks to build the portfolio quickly. Therefore, they may choose 70 percent of stocks and 25 percent of fixed-income assets to create the right ratio for them.

Do I Need a Personal Financial Planner?

It doesn’t matter how old you are or where you are in your life. You can work with a personal financial planner to help with finances. In fact, you don’t require a high net worth, but you need an advisor who is suited to your specific situation.

The decision to work with a professional is personal. However, whenever you feel confused, overwhelmed, stressed, or scared, that’s the time to hire a personal financial planner.

You can also approach a personal financial planner when you feel financially secure, but you need to know you’re on the right track. Advisors can suggest improvements to your current plan to achieve goals faster or more efficiently.

Also, the best time to hire a professional is when you don’t have any interest or time to manage your own finances. These are just general reasons to consider a personal financial planner. Here are specific reasons:

  • Your Savings Isn’t Invested, and You Don’t Know How – We are living in a world of inflation, so any money you keep in low-interest accounts is likely to decline in value every year. Investing is the best and only way to grow your money. Unless you’ve got a very high income, investing is likely the only option for getting enough to retire.
  • You’ve Got Investments but Losing Money Consistently – Sometimes, even the best investors are going to lose money when they make the wrong decision, or the market is down. However, investing should primarily increase your net worth significantly. If it isn’t doing so, then you should hire a personal financial advisor to find out what’s going wrong and correct the course of action before it gets too late.
  • There’s No Estate Plan – A personal financial advisor helps you put your estate plan together to ensure that your assets are all handled the way you want once you pass away. If you aren’t insured correctly or don’t know what you need, the advisor can assist here, too. In fact, a fee-only financial planner can offer non-biased opinions, whereas an insurance agent might not.
  • Reach Your Goals – Ultimately, a personal financial planner is there to assist you with reaching your long-term goals, and this includes many things.
  • Expertise – Financial planners know about managing money and investing, whereas most people don’t. They’re going to guide you to make better choices than you could alone.
  • Staying Accountable – Most people don’t think that much about overspending one month. Still, a personal financial advisor is going to keep you on track because they aren’t emotional about decisions made. This also helps with investing. They may recommend sticking with it, even if the market plummets, whereas you may be worried and scared and want to pull out.
  • Advice – The primary reason to hire a personal financial planner is to get the advice you need to make the right decisions about your finances. This includes knowing and implementing the best strategies to improve your finances.
  • You Evolve – Your life circumstances are bound to change, so a financial advisor is there to adjust everything to fit your current situation while still focusing on the future.

How Much Should I Pay for a Personal Financial Planner?

There was a rule that was proposed by the DOL (Department of Labor) that required all financial advisors and professionals who give retirement plan advice or help with them to provide only the advice that’s in the best interest of the client. This was called the fiduciary standard. The suitability standard was used before-hand, and that focuses on what’s suitable for the client. Ultimately, the rule passed, but its implementation got delayed, and the court systems killed it.

In that three-year interval from when it was proposed until it died, the media helped shed light on the various ways financial advisors work and how they charge for services. In a sense, the suitability standard is slightly less helpful to clients, but the fiduciary standard cannot be implemented. Still, some personal financial planners chose to voluntarily move to that standard because they wanted to promote themselves as working for their clients’ best interest. Some others, such as CFPs, already used that standard.

Typically, you have three payment options from your personal financial advisor, and it’s up to the professional to set rates.

The commission-based model means that personal financial planners work on commission and sell products to clients. Often, the customer never gets a bill from the advisor personally. Instead, they get financial products with high fees, and some of that goes to the professional. 

You’ve also got the fee-based model. A personal financial advisor can charge clients per hour or a percentage of the AUM (assets under management). Typical percentage fees are roughly one percent, though usual hourly fees can range from $120 to $300. Fees also vary by the experience of the advisor and their location. Some professionals offer low rates to help clients get started with financial planning. Usually, you get a free consultation, which gives you and the personal financial planner the chance to see how well you both work together.

Sometimes, financial advisors earn a combination of commissions and fees. This means they can earn a specific fee for setting up your financial plan and then get commissions for selling you on various investments or insurance products.

There is also the option of using a ‘robo-advisor.’ These digital advisors are tools that use computer algorithms to help you manage money based on specific answers about risk tolerance and goals. You don’t need a high net worth to start, and they’re often cheaper than humans. 

However, robo-advisors can’t help you get out of debt or figure out your child’s education. It isn’t going to talk you out of selling or buying investments because you’re fearful. Also, they can’t help with complex tax and estate issues.

If you are ready to work with a personal financial advisor, now is the time to apply to work with someone today.

How Do You Choose a Personal Financial Planner?

It’s important to know what a personal financial planner does and when to use them. However, now you need to understand how to select the right professional. There are tons of them out there, so this step is crucial.

Typically, you’re going to need a certified financial planner (CFP). This certification is an instant sign of credibility and trustworthiness. However, it’s not a guarantee. It might be best to ask friends or coworkers who they use and what they recommend. Consider asking someone who’s in the same financial situation as you. For example, if you’ve got kids, as your neighbor with kids. If you just got out of college, check with a friend who did the same.

Consider a personal financial planner who is fee-only, which means they charge you based on the services they provide. This may not work well for investment planning, so be prepared to pay commissions if your goal is to invest better.

It’s also important to consider the professional organizations the planner belongs to. You should always research the person and the company they work for. This is going to help you learn what they can do and how effective they are going to be.

If you’re still unsure, consider Adam Fayed. Apply now and start changing your financial future.

What’s the Difference Between a Personal Financial Planner and a Personal Financial Advisor?

Ultimately, there are no differences between the terms ‘personal financial planner’ and ‘personal financial advisor.’ They are interchangeable, and you’re still going to get the advice and quality you expect from a financial professional like this. 

Primarily, the term ‘personal’ just indicates that you’re getting more personalized service from the professional. It’s going to be tailored to your unique needs and focus on where you’re at now and what you want to accomplish.

However, you could say that a personal financial planner is someone who helps you create the right plan to meet your short- and long-term financial goals. With that, a personal financial advisor is a broad term that focuses on people who help you manage money through investments and other means.

Wealth Management

What Is Wealth Management?

Wealth management focuses on investment services, but it also combines other services relating to financial needs. Primarily, it’s a consultative process where the wealth management advisor gains information about what the client wants and tailors a strategy for them using the most appropriate services and financial products.

In a sense, wealth management is a higher level of financial planning. It often includes comprehensive management of your investments. However, there’s also tax guidance, financial advice, estate planning, and legal assistance when necessary. It’s often suited to more affluent clients. This means you may not need a wealth management advisor right now, but your needs could change with time.

The wealth management advisor often creates the right investment plan and strategy for clients to manage assets easily. They usually aim the services to the highly wealthy and often have the right experience for financial issues that affect the super-wealthy, such as avoiding estate tax. 

Do I Need to Hire a Wealth Management Advisor?

Most people wonder if they need a wealth management advisor. In short, you need to have a lot of money to require these services. Wealth management often requires account minimums. For example, you may need $2 million invested and many millions in investable assets. However, some companies offer simple ‘wealth management’ services. That way, you can have a minimum of $250,000 to work with a wealth management advisor.

What Does a Wealth Management Advisor Do?

A wealth management advisor assists you with every financial planning need. This includes managing the tax ramifications of your business income and setting up donor-advised funds for charitable contributions.

Typically, a wealth management advisor offers similar services to a personal financial advisor. However, financial planners often let you buy services on an as-needed basis. If you only want to determine how to reach your retirement income goals, some planners charge you only for that service. 

Personal Financial Advisor vs. Hedge Funds?

There’s much more public awareness about hedge funds compared to a personal financial advisor. However, the truth here is that hedge funds could be a mixed bag and have some that underperform and some that perform very well.

Hedge funds are a private investment partnership that uses many non-traditional strategies. Some of them are very risky, and conventional managers don’t use them. However, the overall objective is to deliver great returns. The risks can be reduced by hedging.

In a sense, hedge funds are very similar to exchange-traded and mutual funds. They’re all pools of money given to a financial professional to watch and grow. The key difference is often how much control the hedge fund manager has. Their investment choices are usually unconstrained and unregulated within the industry.

Ultimately, a personal financial planner is a better choice than hedge fund managers. They are going to focus on your needs and don’t take as many risks. If you have enough net worth to require a wealth management advisor, the same applies. It’s better to use a wealth management advisor than it is to hire a hedge fund manager.

Though a wealth management advisor often works with people who have more wealth, and so do hedge fund managers, it’s safer to use a wealth manager instead. 

There is an argument for hedge funds. Managers of the conventional mutual fund rely primarily on finding and buying assets and stocks that they think are going to rise in value with time. With hedge funds, there’s no difference if the market goes down or up, at least in principle. There is money to be made, even in bad times.

For mutual funds and the like, the goal is to outperform a benchmark, so it’s easy to see if the fund outpaced it for a certain period of time. Hedge fund managers don’t focus on benchmarks. They focus on absolute returns, with higher being better. In a sense, a hedge fund protects the investor’s money because it doesn’t track the stock market swings. They just chase money where it goes. However, they can have issues if they don’t use the commonly tracked indexes. 

Why Should You Use a Financial Advisor?

Most people don’t know how to manage savings accounts and may be risk-averse. This means they’re scared of taking any risk, which deters investing at all. Therefore, their money never leaves their bank account, and they can’t earn high annual returns.

A personal financial planner helps you get the right level of return so that you grow your capital with time above the current inflation level. A skilled personal financial advisor can help you get a 10 to 12 percent return on interest each year over the long-term. However, this is an average, so your returns could be over or under based on the volatility of the markets and your investments.

Savings of the Average Person per Country?

According to one article from CNBC, the average person has an average savings amount of $8,863 in the United States. This figure is probably calculated as a median rather than the mean. That way, the data is less skewed and focuses on the upside. With this option, it’s a better reflection of what an average person has in savings without any wealth gaps influencing the data.

Most people think that $8,000 is rather high, but the truth is it’s low. Primarily, this comes about because the most popular trend over the last couple of decades has been to invest income into property (usually their home).

According to that article, the median net worth for all Americans is $94,670, but the median net worth that excludes equity is $29,410. Therefore, the average American has about 69 percent of their capital tied up into property, 20 percent is in the stock market, and only 10 percent is in savings.

Most people invest most of their capital into property as they feel it’s a good investment. However, stock market indexes usually have better returns over the long-term. 

The goal of a personal financial advisor is to boost your net worth and focus on other investments than property.

What Do Most People Invest Their Money In?

Most people think of investing and focus on the stock market, but there are so many other options. This is what the majority of people do, and your personal financial advisor can assist you with that. However, they’re likely to broaden your investment mind to other things like:

  • Money market funds
  • CDs
  • High-yield savings accounts
  • Mutual funds
  • Government bonds
  • Dividend stocks
  • ETFs
  • Real estate
  • Individual stocks

A savings account rarely earns much money, but you can find high-yielding options. That means you get higher interest rates while the money sits there. Most financial advisors want you to start here and build at least three months’ worth of expenses into your account before you work on other investments.

CDs are often a great choice when you know you’re going to need the money in the future. This can include a wedding, a down payment on a house, and the like. There are different term lengths, but the most common are three, one, and five years. However, you are penalized if you take money out early, so it’s only a good choice for money you aren’t going to need immediately.

When you’re ready for a bit more risk, money market funds are the next step. They’re often safer than stocks, but the money in your account is put into other investments, so the net worth can go up and down. You’re probably not going to see significant returns, but they’re a great start.

In a sense, though, it’s better to talk to a personal financial advisor and find out what they recommend. If you’ve got a high net worth, a wealth management advisor might be better. However, you’ve got to have enough net worth to use their services.

Regardless of where you are on your financial journey, it pays to use a financial advisor. Check us out to find out why you should use our company.

History of Financial Advice

When you think of financial advice, you probably think about a salesperson pushing products and padding their pockets. Most people shy away from a personal financial planner because they believe they’re only there to make more money for themselves.

This is a huge misunderstanding. While some advisors might use the old-school model of commissions and selling, most of them don’t sell anything. It can be helpful to take a glance at the history of financial advice so that you know how things have improved.

Pre-1980s

Before 1980, the name of the game was only on huge commissions – for the personal financial advisor. The internet wasn’t available, and most people only chose stocks and bonds with few companies out there. Brokers tended to make high commissions on the stocks they sold.

However, in May of 1975, that all changes. May Day is when the SEC demanded that brokerage firms deregulate commissions. Before that, brokers charged a fixed price for any trade, regardless of the size. Small investors paid much more or just didn’t invest. Those with a high net worth had more access, but brokers bled them dry. After 1975, it changed because trading fees now had to be set by the market competition.

1980s

With the deregulation of commissions, broker fees continued to drop well into the 1990s. More discount broker companies were created to make it more accessible to invest for more people. The other brokers were threatened, but change was inevitable and already underway.

1990s

The brokers who were mainly against the SEC’s mandate ended up adapting. They started to sell mutual funds, which saw an increase of 1,100 percent between 1990 and 2000. Mutual fund supermarkets were then born, so the spread of mutual funds on commissions declined. 

From there, the first ETF backed by the SEC was born. Many companies waived fees, which forced brokers and product manufacturers to adapt. Brokers decided to offer asset allocations instead of individual funds. At first, they were commission-based, but they ditched that model and worked on fees.

In a sense, the 90s were a turning point. Personal financial advisers focused on diversification and risk management. They built customized portfolios for clients and addressed their needs instead.

2000

With people having access to computers, advisers used TAMPs (Turnkey Asset Management Programs) to help them oversee investment accounts so that they could focus on other business areas. In a sense, the TAMP took care of billing, allocations, and account administration.

2010s

With the 2008 financial crisis, housing prices plummeted, and unemployment skyrocketed. The situation ended up disrupting financial services. Robo-advisors were on the rise, and most everything is automated now.

Conclusion

Hiring a personal financial advisor is something you should take seriously. It’s a big decision, but it doesn’t mean you shouldn’t have one or can put it off. However, if you’ve got a lot of money and a high income, a wealth management advisor is likely best. Regardless of the professional you need, there are multiple options. Please apply today with Adam Fayed. Become his client and plan for your future effectively.

Add a comment

*Please complete all fields correctly

Related Blogs

Adam Fayed financial consultant WhatsApp