As I’ve continued to interview the experts for The Financial Health Telesummit, one theme has consistently come up that I realized I haven’t written about yet – the importance of having a strong financial team to support building and strengthening your financial foundation.
One expert even put it like this – why do we expect ourselves to ask for help in all of the other areas of our lives (i.e. car repairs, house repairs, etc.), yet we don’t always think to ask for help (or feel ashamed to do so) when it comes to our money?
I couldn’t agree more. Having a strong financial team in place is a critical component of becoming financially literate and powerful. Even someone like me (who was raised in a household where proactive money management was taught and who is a CPA herself) has people on her own financial team – a CPA (who specializes in taxes because I don’t), a financial advisor, insurance professionals, and attorneys, just to name a few.
So, who are the key players to a solid financial team and why do you need them? Great question!
- CPAs – Certified Public Accountants (or CPAs) are individuals who are trained in understanding the specific rules and regulations in a variety of different areas (i.e. audit, tax, etc.). In terms of the most commonly used CPAs for individuals and small businesses, CPAs who specialize in understanding taxes are often the most helpful. CPAs can help you keep more of the money that you make by helping you to legally take advantage of each and every tax deduction for which you’re eligible. I typically recommend considering working with a CPA in two instances: 1) you simply don’t understand how to effectively fill out your own taxes and would be better served by having someone to help you with them (many people fall into this category) or 2) your particular situation is complicated and you may miss an opportunity to reduce your taxes because you are not a tax expert.
- Insurance professionals – Licensed insurance professionals can help you to manage your risk in a variety of different areas, with different types of insurance including (but not limited to): property, casualty, life, disability, health and long-term care. Each person’s situation will be different in terms of the amount and type of insurance that they need, and having someone who can help to ask you the right questions and make decisions with you on what serves you best can prove to be very helpful to protect you and your loved ones.
- Estate planning attorneys – Attorneys who specialize in estate planning are often looking to help you with drafting legal documents such as wills and trusts in addition to other specialized legal documents that you may need to protect your assets or your loved ones. These attorneys may also specialize in certain areas of the law (including family planning or elder care) as they seek to understand your particular situation and help you legally document your wishes and communicate those wishes effectively with your loves ones and with the courts.
- Financial advisors/planners – Financial advisors and planners help you to take a look at the entire picture of your financial health from insurance, to investing, to looking forward to retirement to see what your income sources will be. These professionals are great at helping you to understand your entire picture and to assess any “gaps” that you may have in your financial plan (short-term or long-term), so that you can patiently work through and address those gaps to be able to sleep well at night. They also help you to focus on protecting and growing your financial assets.
And now that we’ve addressed who the key players are, another question I’d like to address is this – where do I find someone that I like and how do I know they’re the right person for me to work with?
If you’re not sure who to reach out to for help, I recommend 2 approaches: 1) ask a financial professional that you have an existing relationship with to recommend someone to you, as they often have a close knit group of people they know, like and trust and would be happy to connect you with; or 2) ask people around you (friends, family) who they work with and would recommend. As you’re considering who to work with, I also recommend interviewing more than one person in each category so that you can find the professional best suited to your situation and who aligns well with your personality.
In terms of how to know whether someone is the best person for you to work with, there are usually 3 key things to assess from my perspective: 1) there’s a sense of ease in your conversations with the professional (i.e. you feel as if you can trust them); 2) it feels as if the professional is talking with you and not at you (if they’re talking too technically or with too much financial jargon and they seem to be annoyed when you ask questions, it’s time to excuse yourself and look for someone else); and 3) they have a service mentality vs. simply seeing you as dollar signs (if you get that icky “pushy” feeling from someone, it’s time to find someone else!).
In the end, there are a lot of fantastic professionals out there waiting to serve you and get you in the best financial shape of your life – you just need to know who to look for and how to find them!
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