I recently received an email from one of my podcast listeners. In it, they explained that they’ve listened to the show for quite a while and that they’ve learned a lot. However, they had a question that I’ve heard several times before. So, I thought that I would dedicate today’s post to answering their question. What do financial planners do for business owners?
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In order to answer the question, “What do financial planners do?” I first need to define a few things. Namely, the difference between someone who works in the financial realm and a CERTIFIED FINANCIAL PLANNER™. You see, there are many people in the financial world who like to call themselves financial planners. However, stockbrokers and insurance agents don’t adhere to CFP®s standards. Likewise, there are some actual CFP®s who don’t operate like a CFP®.
The term, “financial planner,” has become a kind of buzzword in the industry and many people try to capitalize on it. But a true financial planner does more than just invest your money into Wall Street or ensures that you have enough insurance to mitigate the risk in your life.
I can recall being a young business owner and visiting a “planner” at one of the big box investment firms. I sat there across the desk from him, having just made over $100,000 (before the age of 18) in my business. I’ll never forget what he said to me. He said, “You’ve done quite well. But when you want to learn to make real money, bring your money to us and I’ll invest it for you.” I still get angry at the audacity of this “planner” to act as though I didn’t know how to make money.
As business owners, we are rock stars. We know how to make money. That’s why so many of us are turned off by the brokers on Wall Street. They operate with the mindset that only they are capable of making “real” money. On the other hand, there are many people who work in the financial realm and do genuinely good work that helps people. However, business owners are a different breed. We don’t need someone to teach us how to make money. So, what do financial planners do?
In your mind’s eye, I want you to envision a box. In this box, are all of the things that you can control as a business owner. There are four quadrants in this box and you have the ability to become a “Google expert” in each of them. These four quadrants are:
Although you understand these four quadrants and control them, that doesn’t mean that you handle them efficiently. A financial planner helps business owners maximize these areas by making them efficient. They are able to create plans and strategies that make these four quadrants work in synergy with one another. Now, these plans and strategies are going to be different on a case-by-case basis because no two situations are identical.
In my own practice, we use the four quadrants to teach clients they can double their net worth every 3 – 5 years. Of course, we can’t guarantee these results but in many cases, we are able to achieve this goal. However, simply putting to work the elements that business owners are already able to control isn’t where the true value of a financial planner is found. Instead, it is the areas that are outside of that imaginary box—the areas that business owners can’t control—where financial planners truly begin to shine.
By bringing the areas that business owners can’t control, into effect, financial planners are able to further maximize the efficiency of the four internal quadrants. This alignment makes it possible for the business owner’s net worth to double every 3 – 5 years. So, what are these uncontrollable areas?
A financial planner walks a business owner through a process that guides through all of the four quadrants while incorporating the areas that business owners can’t control. They do this so that the business owner can see where they are going, giving them a clear path toward achieving their goals in a tax-efficient and time-efficient manner. Financial planners are guides or coaches that identify your current status and align it with your future goals
At the end of the day, financial planners help their clients get from point A to point B in the most tax-efficient and time-efficient way possible. We don’t simply exist to invest your money or to help you get the insurance you need. We can do those things but that’s not our primary focus.
Friends, life is tough but life is good. Coordinating all aspects of your financial life to achieve your goals in the most efficient way possible can be frustrating. But it doesn’t have to be. Knowing how to answer the question, “What do financial planners do?” can make the decision to hire one, at least, financially simple.
If you think that you and your business could benefit from the services of a CERTIFIED FINANCIAL PLANNER™ or if you have questions about the services that we offer, reach out to us. The team at Financially Simple is ready to meet with you!