Section One

"A Must Read"

The Wealth Planning Process

Let's start with the obvious; everyone has an agenda. Attorneys and CPAs are looking for billable hours. Stock Jockeys want to make commissions from selling you the latest deal of the day. Life Insurance agents want the commissions that come from the sale of their products. Trust Officers want to manage the trusts you create and have the trust fees flow into the financial institution they work for. Private Bankers want to lend you money at the highest rate you will accept. Portfolio Managers want to capture the investible assets you have and get paid a fee for allocating, investing and watching out for your money. And, banks don't invite you to their stadium suites just because you can make good conversation in a crowd.

There's nothing wrong with having an agenda, the end result of which is someone makes some money. Just be sure that the agenda starts and ends with you.

There's an old joke that in most major cities in the US there is a Financial Planner for every checkbook. Open the phone book, if you still use one, and see the pages and pages of people who want to help you plan your financial affairs. Try Googling Financial Planners and your geographical location and see what pops up. It is highly probable that hardly a week goes by that you don't get at least one invitation to a Financial Planning Seminar offering a free dinner to those who attend with, of course, no obligation. The airwaves are inundated with ads and seemingly neutral and valuable information all designed to set a hook in your assets and slowly reel them in.

It may sound like Financial Planners, or anyone wanting to offer you their expertise and advice for a fee and/or commission, are not well-intended. For the most part, they truly are trying to balance your needs with their own need to make money. No one with office rent, staff salaries, office supplies, equipment purchase and maintenance, phones, internet and website development, hosting as well as everything else that goes into running a business can ill afford to give you advice without getting something back in return. Even missionaries have to have food, clothing and shelter.

The reason for going through the above is to make sure you understand that no one works for free, and this includes banks. However you want to cut it, fees and commissions will reduce your assets. But this is not necessarily a bad thing if the end result is an increase in assets as a result of planning.

The College of Financial Planning in Denver, CO has done a remarkable job in educating Financial Planners with extensive course work and stringent testing. Someone who has been granted the Certified Financial Planner (CFP) designation by the college has proven their ability to grasp and communicate advanced planning concepts as well as agreeing to abide by the professional principles associated with the designation. Likewise, the American College in Bryn Mawr, PA has done an equally good job of educating practitioners through the stringent Chartered Financial Consultant (ChFC) program and designation. And, the Cannon Financial Institute in Atlanta, GA has experienced great success in giving Wealth Management professionals, working primarily in banks and financial institutions, a working knowledge of Wealth Management Issues and how to integrate this knowledge in the real life world. The Certified Wealth Strategist (CWS) designation is granted after a grueling amount of course work and on-line and face-to-face assessments.

In today's complex financial world there is a plethora of impressive-sounding designations, but when it comes to working with someone in the financial planning realm, the CFP, ChFC and CWS designations at least show the individual's endurance, persistence and ability to pass exams!

There is a big difference between perception and reality. There is the perception that all Financial Planners are going to address a wide range of planning issues when working with you. The reality is that there are many Financial Planners whose sole intent is to handle the investment of your assets. Initially, the planner will go through the motions of fact finding by filling out a questionnaire. This information will be run through a computer loaded with some version of planning software. Out comes a Financial Plan that usually is nothing more than a Cash Flow Analysis and Retirement Income Analysis, both of which are designed to show you why you need to save more money and hand it over to the planner. But wait a minute. You're saying this sounds like someone who is still in the accumulation phase of his/ her life. That's true because many planners are really just investment people who are looking to capture assets. For those clients who have moved on past the Accumulation Stage, they want to capture the assets through investing the assets for retirement income purposes.

Understand that this is not necessarily bad. You may only need planning that involves investment advice, and there's nothing wrong with that. However, there are many, many people who need comprehensive and cohesive planning that goes far beyond advice on how to invest their money.

What is The Wealth Planning Process and how does it differ from typical Financial Planning? The basic building blocks of any Wealth Plan are:

Asset Protection

Succession Planning, and

Saving Taxes

To begin with they both start at the same place, the gathering of facts like name, rank and serial number. The facts will probably include questions about what's coming in and what's going out, a listing of your assets and liabilities and probably even a few subjective questions. Basically, both Wealth Planning and Financial Planning start at the same place: where you are.

The next step is to determine where you want to be at some point in the future. That point may be a comfortable retirement, which most Financial Planners can assist you with. Or it may include a myriad of liability issues, estate issues, business continuation issues, insurance or titling issues or any of the Thirteen Wealth Management Issues discussed in the next chapter. Many Financial Planners can get over their heads here because their practices are designed to capture assets, manage those assets and keep the clients happy with what they are paying for. This is not to say that there aren't Financial Planners who give significant attention to issues other than those relating to investments, but a true Wealth Planning Process presents you with strategies not products.

One very successful Wealth Planner, long tenured in the field, describes his process like this:

"Just like a Financial Planner I begin with finding out where you are and then help you determine where...