Financial Planning - Frequently Asked Questions
What credentials and experience does the principal at AJW have?
Amy holds credentials that are highly regarded within the financial planning industry. She received a B.S. in Business from the University of Minnesota, Carlson School of Management, is also a CERTIFIED FINANCIAL PLANNER™(CFP®) professional and Certified Divorce Financial Analyst (CDFA®). Amy has over 25 years of experience working in the financial planning industry.
What is a Certified Financial Planner (CFP®) Professional?
An individual who has earned this designation has met the education, experience, examination, ethics standards and continuing education established by the Certified Financial Planners Board of Standards (CFP Board). You should be aware that nothing prevents an individual from stating they are a “Financial Planner”, even if they have not earned the CFP mark. Therefore, it is important to differentiate between planners who have earned this designation and those who haven’t.
What is financial planning?
Financial Planning is a process that develops a plan for budgeting, taxes, retirement, education, insurance, and estate needs, which meets ones needs and goals.
Following an initial meeting to establish your financial concerns and future goals, your financial data is gathered and analyzed to determine your financial situation. A financial plan is then developed as a recommendation of how best to meet your goals, taking into account your current financial situation.
What is a financial planner?
An individual who assists you in developing and implementing a financial plan and investment strategy.
Why should I use a financial planner?
There are many reasons to use the services of a financial planner. Some of the most important include:
- Experience and Skill – you can rely on the financial knowledge of a financial planner to manage your investments rather than risk your financial future by relying only on your own investment knowledge.
- Proven Track Record – although past history is no guarantee of future performance, using the services of a financial planner who has an established and proven investment program adds confidence to your financial and investment plan going forward.
- Coordination of Financial Services – maintaining a close, personal relationship with you allows a financial planner to provide advice on a range of financial matters, helping in overall coordination and management of retirement and investment planning needs.
- Lack of Time – most people do not have or do not wish to commit the time necessary to properly manage their investments.
What are the benefits of working with a financial planner?
As mentioned above, there are numerous benefits to working with a financial planner to help create your financial planning road map. One of the key benefits is that a well constructed, implemented and monitored financial plan may allow you to reach financial independence quicker than if no plan of action was formulated. For many clients, financial independence gives them the ability to stop regular employment knowing they have sufficient retirement income to maintain their desired lifestyle for the rest of their life and provide for their loved ones after their death.
What is your investment process?
- Step 1. Initial Meeting – we will meet with you to develop a profile of your investment objectives, risk tolerance and time horizon.
- Step 2. Create Personalized Financial Plan –we will gather and analyze your financial data. Then, comparing your financial situation to your unique needs and goals, we will create and present to you a specific, individualized financial plan.
- Step 3. Develop Investment Strategy – we will develop a personalized investment strategy that takes into account your risk profile and financial plan. The strategy will be designed to maximize your returns based on your risk tolerance, through a carefully diversified investment allocation that includes multiple asset classes and investment styles.
- Step 4. Implement Investment Strategy – we will invest your dollars according to the investment strategy discussed with you and outlined above.
- Step 5. Monitor and Rebalance Investment Portfolio - we will monitor your portfolio on an ongoing basis, to ensure it continues to follow your investment strategy, and rebalance assets as needed.
- Step 6. Report Results – we will discuss your portfolio’s performance at your review meetings and make any adjustments needed to your financial plan and investments, as your life changes.
Do you recommend the mutual funds and stocks that I should purchase?
Yes, as part of our financial planning services, we will make specific investment recommendations as outlined in the investment strategy that we develop for your specific needs.
Do I relinquish control of my assets?
You will always maintain control of your assets. We do not ask you to give us discretionary authority over them, and will always obtain your authorization prior to placing any trades.
How do I determine my long-term financial goals?
Your goals might include early retirement, travel, vacation home, or building a family business. AJW will lead you through a process to help you determine your goals and to prioritize them as necessary. AJW will help you to meet your goals, by creating a customized financial plan, strategic investing and tax planning. As your life changes, your goals may too. AJW will continue to work with you in identifying changes to your goals and updating your plan.
How often will my financial plan be reviewed?
AJW suggests two in-person reviews per year, or more as needed. At each meeting, we will discuss and evaluate any changes in your life, and make proper adjustments to your plan. We will also review your goals and how you are progressing towards those goals.
What is included in our financial planning services?
At AJW, our goal is to help you define, understand, and prioritize a financial plan that relates to your own values and goals. Additionally, we will make recommendations regarding retirement, tax planning, investment analysis, cash management, estate and insurance planning to help you make the best possible decisions for your financial future. We strive to assist with all financial questions, including can you afford a new home, should you purchase or lease a car, how much money should you lend to your kids, etc.
How are we compensated?
AJW believes that your success in meeting your financial goals starts with a comprehensive, customized financial plan. We start with a free, no obligation, initial consultation to learn more about you and to discuss our services. At this meeting, we quote you a cost for completing your financial plan. In most cases the cost ranges from $750 to $2,500. If we have worked with you during your divorce process, this step may not be needed.
Once your financial plan is in place, AJW can help you implement your strategy. When investing assets, AJW is able to work on a commission or fee basis, though prefers in most cases to use a fee-based advisory platform. This means that compensation is derived mainly from an advisory fee that is charged as a percent of assets under our management, instead of commissions obtained from investment companies for referring their products. This allows us unbiased flexibility to pick the most appropriate security (i.e. mutual funds, stocks or bonds) for your needs. Our advisory fee varies between 0.7% - 1.25%, according to your asset level, financial complexity and needs.
How much money do I need to work with you?
The majority of our clients assets typically range from $750,000 to $5,000,000. Our minimum level of assets under management is $500,000. AJW may periodically waive this minimum investment to help existing client’s family members (i.e. child or parent).
Does AJW only work with women?
AJW works with a broad range of clients, of whom approximately 30% are married couples, 5% are single men, and 65% are single women. Many clients are over age 50.
AJW welcomes the opportunity to work with all individuals. Because AJW is knowledgeable about the unique financial and emotional considerations that need to be taken into account in financial planning, for those who are single women due to divorce or death of a spouse, AJW has developed a niche area.
How do I become a client?
First, contact our office to schedule a no cost initial meeting. This meeting will give us the opportunity to meet each other and determine whether we both feel it makes sense to move to the next step. The next step is for AJW to understand your current financial situation and goals, to identify how we can help you with your objectives. We will prepare and present to you a financial plan and investment strategy. Once you have seen how we can help you meet your financial goals, you can make an informed decision as to whether you feel comfortable working with AJW on your investment management needs.
What should I bring to my first meeting?
While it is not necessary for you to bring anything to your initial meeting, we do welcome you to complete and bring our Client Profile worksheet so that we can get to know you and your family better. We can email this form to you, or you can locate it under meeting forms on our website.
When do I contact Amy versus the other team members?
Amy has assembled an experienced team of professionals to support you and the services offered by AJW. She works closely with at least one other team member on each client case, so that we can offer you excellent customer service at any given time. You are always welcome to contact Amy directly for any questions or concerns you have. While Amy spends much of her day with clients at in-person meetings, she will return your calls promptly. Alternatively, your AJW team member may very well be able to answer many of your questions and take care of your needs even quicker.