Creating Financial Plans

 
When compensating your advisor, which is best for you: paying 1% of your assets under management (AUM) or a flat fee? Answer: the flat fee. The idea is to take the emphasis off of performance and more on overall planning services.
 

 
Have you ever wondered why you make certain decisions about money? What do you believe about money, and where do those beliefs come from?
 
I believe our emotions, beliefs and values about money drive how we live our lives, and yet we don’t even acknowledge their existence. To get help understand your subconscious values, complete the following five sentences – write the first thing that comes to mind without putting much thought into it:
 
The rich got that way by _________________.

Rather than thinking of a financial plan as something that constrains your lifestyle, think of it as permission to spend.
 
Many folks are afraid they aren’t saving enough for their future. They live in fear that every dollar spent today is a dollar they may need down the road to help fund kids’ college education, their own retirement and the family’s health care. The reason for this fear of spending: They don’t know how much they need to set aside for their financial goals. When they do spend money, there can be a lot of guilt about it.
 

Women have a different attitude toward money than men do. This is important in planning for the future. Increasingly, women are a family’s sole breadwinner.
 

 
Many fee-only advisors charge you a percentage of your assets under management. But this system has big weaknesses. A flat fee often works better for you.
 

 
Women behave differently toward money than men do. Data underscore how far apart they are. In his classic book, Men are from Mars, Women are from Venus, author John Grey shows that the sexes view the world and react to life in divergent ways.
 

Right now, women are under-served by the financial services industry, but they need advisors just as much as men do.
 
There still a huge disconnect between the women who have a financial planner and the women who want one. Statistically, a Cerulli Associates study says, only 20% of women investors work with a financial advisor, but 70% would like to work with one.
 

When it comes to your finances, are you on offense or defense?
 
Just like in sports, many of us take a passive, defensive approach to our financial goals. We decide to wait until things calm down in the markets or until the kids are through college to really address our longer term needs. We keep more than we should in cash in the hopes that we’ll feel more comfortable down the road with investing it. 
 

 
If you feel like you are not getting good service from your advisor, you should pick a new one. But before you look for a new advisor, ask yourself whether you are actually a good client.
 
The fact is that advisors spend more time on their good clients. But what does it mean to be good? If you want to have a meaningful and rewarding relationship with your current or next advisor, here are some tips:
 
1. Trust
 

 
Couples often feel pressured to open a joint account or combine all of their finances. Should they?
 
While there are some benefits to doing this, it is important that your decision on this matter is guided not by custom, but by what you know is best for you.
 
Couples can be traditional married couples, same-sex couples, engaged couples, life-long roommates and every set of two people in between. As more people wait until they are older to get married, there is a level of independence they may not want to give up.