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The Value of a Financial Planner Thumbnail

The Value of a Financial Planner

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Dan Loose, MBA, CFP®

What tasks in life do you hate to perform? Paying bills? Working out? And what about those tasks that you really aren’t very proficient at performing? Say, balancing your checkbook? Performing maintenance on your car? Or how about those tasks that are just so frustrating that you would rather swallow a hand grenade than do them, or instance, filling out IRS forms?

Confession time: my wife thinks I am a handy guy, but I’ve come to the difficult realization that I cannot do it all and certainly not all things well. For instance, I simply cannot perfatape®.  Perfataping® or simply “taping” is the process of filling in the gap between two pieces of sheetrock with paper and plasterboard compound. When done well, one cannot tell where the one sheet ends and the other sheet starts. No matter how carefully I try, the wall just looks horrible; the seam is obvious. I’ll confess, I am lousy at taping. Therefore, I have learned from experience that I hire that task out to the experts to do for me. And, guess what?  Not doing every single task in this life by myself is okay. I am not less of a man for discovering my limits. It is actually liberating in some weird way.

Developing one’s own personal financial plan is one of those life skills that some people can do on their own just like some people love to tear down and rebuild internal combustion engines. For the majority of people however, there are financial planners. A financial planner is simply someone who spends the time necessary to learn where you are now in your financial life AND learn what your goals and dreams are for where you want to go financially. The planner then creates a plan to get you from point A to point B, allowing for deviations (waypoints) in the course along life’s way while protecting you from the unexpected hurricanes of life.

From years of doing financial planning, I have found that most people understand more about financial planning than they give themselves credit for and they are often fairly proficient at performing many of the tasks that are absolutely fundamental in keeping on course—say, constructing a budget. But few people, even if capable of doing it on their own, end up doing it well on their own.

Where most people stumble are in the following four areas: 1) They know they need some help but they don’t know whom to trust; 2) They simply don’t know where to begin because the process seems so overwhelming; 3) They are afraid obtaining financial planning help is going to be too expensive; and 4) (an area most people don’t even recognize as one in which they will eventually need help) They need someone with the perspective to keep them on course (this is basic accountability to their written plan) even when the market is down 20 - 30%!


Trust is something that must be earned, not proven by marketing slogans. At Medicus, we are fee-only Certified Financial Planners™. This means we are full fiduciaries who have taken an oath of providing the highest level of service to our clients even if that means we are personally disadvantaged by providing that advice. Furthermore, we are not compensated by fees or commissions based on product sales. We are obviously “sold” on fee-only, however, to be fair, it is also true that there are some fine financial advisors out there who are in-part or in-full compensated by commissions so we don’t want to portray the whole commissioned world as evil. However, at the same time, EVERY advisor at Medicus was once in the commission world at brokerages and we ALL have our stories of how commissions were at times able to cloud the judgement of financial planning colleagues to the detriment of their clients.

Getting Started

As to the second point, this is indeed perhaps the hardest step in the process because this requires you to go through that stack of papers on your desk at home to collect the statements; find that key to the safety deposit box to get a copy of the will; contact HR to get your retirement plan document for us to examine; and provide us with a copy of your monthly household budget. We try to simplify this by giving you a checklist with the needed items in an easy, organized format. Nevertheless, like starting the project of cleaning out your rain gutters, you need to pull together some items to provide us with the information we need to do our planning job.


Point three should be a no brainer because it has been proven that financial planning pays for itself many times over. The literature indicates that the total portfolio balance of someone who has a written plan is more than double what the portfolio balance is of someone without a written plan.1 How would your nest egg look if it were magnified by two? Furthermore, the individual who has a written plan AND a financial planner (think: personal trainer for one’s finances) has a portfolio with a value that is more than quadruple the balance of the person without a written plan.2 The assumption being that the financial planner acts as an accountability partner who keeps you focused on your goals and keeps you from selling on the “news” that the market is going to crash next week or buying on the “news” that ABC stock is going to revolutionize industry XYZ. Remember, the guys selling “news” make money from the story that get’s the largest headline, not on the veracity of the story. Having a plan also gets you to save more and spend less—to the tune of 4 or 5 times as much saved AND then invested.3 How would your nest egg look if it were magnified by four?

Sadly, according to the CFP Board only 19% of families have a comprehensive financial plan.4 The median 401(k) balance of someone in the 55-64 age group is $177,805, according to “How America Saves 2016,” a report from Vanguard. Using the commonly used "4% rule" of retirement, this translates to sustainable income of just $7,112 per year [$593 per month] in retirement. Even when combined with Social Security income, this isn't nearly enough for most retirees to sustain their quality of life. Worse yet, 45% of baby boomers report having no retirement savings whatsoever, according to Motley Fool.5


Point four deals with the behavioral side of personal finance. We all know the guy who sold everything and moved his portfolio to cash in February 2009. We’ve also heard about the people who gave Bernie Madoff their last cent because the 25% annual returns were a “sure bet.” The behavioral side of planning is without a doubt the trickiest because people do the most unbelievable things for the craziest reasons at the least opportune time.

The advantage of working with a CFP® is that you are dealing with a third party who is removed from the emotions of fear and greed around “your money.” He has the vantage point of an outsider with a deep understanding of economic history, the experience investing in placid and tumultuous markets, and one who knows your goals and dreams for your life, not just your portfolio. This comprehensive information about your specific life goals helps the financial planner make wise, longer-term decisions. These are decisions that are often very different from the decisions someone without that comprehensive information would make on your behalf. Instead of reacting to the headline grabbing market news, the prudent planner keeps you on course, when you might otherwise want to steer the ship towards the cries of the sirens of the market.

At Medicus, we build portfolios specific to the needs of the individual. These may be portfolios that are not very “sexy” by some stock broker and swamp land salesmen standards. But these portfolios keep our individual client’s money invested within the parameters around that client’s risk tolerance without taking on undo risk—all while keeping the managerial costs, both at the underlying fund level and at our firm’s level, in check. Finally, we monitor the overall plan and the investment piece of that plan with the client every six to twelve months to ensure that the client will safely make the destination port at the appointed time.

If you think having someone in your financial corner might benefit you, gather up your statements, your documents, your policies, your returns, and your budget and come in for a free, no-obligation consultation to explore how working with a non-sales-quota-beholden CFP® at Medicus Wealth Planning might benefit you.

1 The Future of Retirement: A New Reality, Global Report.” Reproduced with permission from The Future of Retirement, published in 2013 by HSBC Insurance Holdings Limited, London. Designed and produced by Global Publishing Services. Page 35.

2Ibid. Page 32.


4Consumer Federation of America, CFA, “Financial Planning Profiles of American Households: The 2013 Household Financial Planning Survey and Index, A summary of Key Findings,” Prepared by Princeton Survey Research Associates International, Page 4.

5Motley Fool. https://www.fool.com/retirement/2017/07/29/9-baby-boomer-statistics-that-will-blow-you-away.aspx.