1. Why is having a financial plan important for me?

A solid financial plan helps you answer three very important questions:

  • What are my priorities and objectives?
  • Can I achieve my goals?
  • Am I overlooking anything important?

Dealing with your financial goals in a straight-forward, thorough and objective manner gives you a sense of clarity. With clarity comes direction. With direction comes motivation. And with clarity, direction and motivation, your odds of success are greatly increased.

2. Tell me about the financial planning process.

Financial planning is a multi-step process.  It starts with an in-depth look at your current situation, your goals, and your concerns.  Then, based on where you are and where you want to go, it creates a kind of road map to guide you toward your desired future.  At Keffer Financial Planning, we break the process into seven distinct steps, which you can see in detail in the Seven Steps flowchart that’s enclosed.  It is important to remember that financial planning is a process, not a one-time event.  As things change over time – and they most certainly will – we must be prepared to adjust the plan in order to stay on course.

3. Sounds like a lot of work!  Is it really necessary to go through all that?

It may seem like that at first, but the good news is, if you follow your plan and maintain a disciplined approach, you can rest well knowing you can reach your goals.  As a bonus, most people feel a sense of relief and control from having gone through the effort to get organized to do the plan.  At Keffer Financial Planning, we try to make the process as easy for you as possible, including the implementation, if needed.

4. I’m afraid that if I do this, the plan will indicate that I can’t possibly reach my goals unless I save more than I can afford to.  I feel pretty stretched right now.

Most people share this concern to one degree or another.  Even folks who are pretty well off sometimes have concerns about the things that could go wrong.  No one can guarantee what the future will bring, but we do know that it is up to us to do all that we can to take care of ourselves and our families.  This means charting a course and establishing a discipline.  Yes it might mean that you have to give up on some goals (annual Caribbean cruises or retiring at 55), but there is great peace of mind to be gained just by knowing that we can secure at least a modestly comfortable level of security, educate the kids, and buy the basic insurance protection we need.  It makes it a lot easier to make the cuts that need to be made in order to save as much as we must.  Then, if things go well, maybe that occasional cruise can be resurrected.  Who knows?

5. I’m bearing down on 50 and have hardly saved at all.  Isn’t it just too late for me?

It is never too late to take control of your situation.  You may struggle to achieve the exact retirement you hoped for at the time you hoped to do it.  But let’s make sure you get on track to meet your basic needs now!  It will give you a great sense of relief to be traveling down a defined path, even if you started later than you would have wanted.  You can’t look back.  It’s what you do today that’s important.

6. Who can benefit from your services?

Anyone seeking financial peace of mind can benefit from our services.  We serve people at all income levels, from all walks of life.  Clients have the flexibility to work with us on either a one-time, as-needed basis or on an ongoing basis.  We welcome clients who simply need a one-time financial consultation or a second opinion, as well as those who need comprehensive financial planning and possible ongoing services.  In addition, any corporation or organization seeking quality, unbiased financial education or a low-cost alternative to their current 401(k) provider can benefit from our financial education programs and hourly retirement planning services.

Most people who work with an hourly, as-needed financial planner recognize the value of professional advice, but they also demand value, transparency, and accountability for the dollars that they spend.

7. What is Fee-Only financial planning and why should it be important to me?

Because we are Fee-Only financial planners, conflicts of interest regarding compensation are removed.  We do not accept sales commissions; we work solely for our clients.  Because we do not sell financial products such as investments or insurance, there are no third-party relationships or outside influences to color our thinking and financial recommendations.  For more information on Fee-Only financial planning, including our Code of Ethics, Fiduciary Code and member requirements, please visit www.NAPFA.org.

In addition, our firm is a Registered Investment Advisor (RIA).  As such, we must comply with a host of regulations designed to protect the consumer.  One important question you should always ask when considering a financial planner’s services: “May I please have a copy of your ADV Part II?”  This document contains important information about the planner’s qualifications, fiduciary duties, history of any past violations, etc.  We would be happy to send you a copy of our ADV Part II.  Please contact us to request your copy.

8. OK, I understand the benefits of working with a Fee-Only financial planner, but what if need to make some investments or buy insurance.  How will I be able to do that?

While we do not sell financial products, we will offer specific recommendations and opinions regarding the purchase of the various financial products that may be appropriate for you.  So, if you need to obtain an insurance policy or a new mortgage, invest in a portfolio of mutual funds, or find an estate planning attorney or tax professional, we can direct you to the resources you need and/or help you obtain these products and services.  If appropriate, we can also help you implement your plan and set up your accounts.  

9. But if I have paid Keffer Financial Planning for advice and I go somewhere else to implement the advice, won’t there be sales charges in those products?  Won’t I be paying twice for advice?

Because our advice typically points toward no-load mutual funds, discount brokerage accounts, and other cost-conscious solutions, we can often help clients save money significantly over the long haul.  In addition to favoring no-load type products, we also have a bias toward funds that have low expense ratios and lower turnover, which usually means more tax efficiency for our clients.  You are of course free to implement the plan wherever you wish.

10.  Does Keffer Financial Planning provide only comprehensive financial planning?

No.  Although a comprehensive financial plan can provide the greatest benefits, we can limit our advisory services to your specific area of interest, such as cash management and budgeting, investment analysis or college education funding.

11.  We are just getting started.  We’ve only just started investing in our 401(k) programs at work and we aren’t sure how much to invest or which options to choose.  Will you accept us as clients?

Yes.  Some firms have minimum income, net worth and or investable asset levels.  Others have minimum fees of several thousand dollars per year, or more.  At Keffer Financial Planning, we realize that everyone has financial needs.  We are proud to work with people from all income levels and all walks of life.

12.  I have already accumulated substantial assets and think I am doing quite well.  But as I progress and build for the future, things seem to be getting more complicated.  I want to be sure I am on track, but I don’t always have the time or inclination to manage the myriad details by myself.   How can you help me?

People who need more sophisticated financial planning or advice will find our services appealing and beneficial.  If you have a desire to simplify your financial affairs, our Ongoing Retainer Client Program may be right for you.  If you are looking for a one-time or occasional professional review or a second opinion to ensure you are on track, we can provide that too.

13.  I’m in charge of the retirement plans and employee benefits at my firm.  I would like to increase the number of employees who participate in our 401(k) program.  How can you help us?

Corporate education is the key in building employee participation.  Our financial workshops can help your people understand the benefits of your program.  Please call to discuss your specific needs.  We can custom-build an educational program for your company.

14.  What types of investments do you provide advice for?

We provide advice for all types of securities, including mutual funds, stocks (as they relate to your portfolio holdings), bonds, bank deposits, and variable and fixed annuities.  We also provide advice on mortgages, budgeting and cash flow issues, 401(k), 403(b) and other retirement programs, stock options, life and disability insurance, etc.  If it has to do with money and finances, we can provide counseling, guidance, and or resources for you.  Because we want our clients to know that they can call on us with any and all of their financial concerns, we use the slogan “Financial Planning and Advice for Everyday Life.”  Clients are encouraged to call us when they have a major life event, such as a new job, a baby, a marriage or divorce, or if they are planning to buy a new home or start their own business.  We also encourage our clients to call us with more common everyday questions, such as “How should I invest within my 401(k) or 403(b) plan?”  "How can I reduce my taxes?”  “What advice can you offer on refinancing my home?”  “How much life insurance do I really need and what’s the best type for me right now?”

15.  If I use Keffer Financial Planning to develop a financial plan, am I obligated to purchase the recommended products?

Absolutely not.  We will offer recommendations, which in our professional opinion will meet your needs and objectives, but you are under no obligation to purchase them.  In today’s competitive market, it makes sense to shop around for the best available product or service.  For instance, if you need to obtain a life insurance or disability policy, we will suggest the kind of policy, which riders and what amounts may be best for you.  We will then direct you to a choice of companies that can provide a quality product at competitive prices for you.  If you wish, we can help you purchase investments and or set up your accounts with a third-party custodian such as a discount broker.

16.  What is your investment philosophy?

As financial planners and investment consultants, we believe in the following fundamental principals with regard to designing an investment portfolio and making specific recommendations: The purpose of a client’s investment portfolio is to fund current and or future financial objectives.  The design of the portfolio must take into account the client’s financial objectives, tolerance for risk, needs for current income or liquidity, and special considerations such as income and estate taxes.  The important thing to remember is that no one can predict the future.  It is difference of opinion that makes a market.  Investment and economic ‘experts’ provided with the same information often come to different conclusions.  We do not suggest that we can, or that any money or mutual fund managers that we recommend, will make the correct decision every time.  We do believe, however, that studying the historic trends and relationships of investment classes and the philosophies and approaches of successful investment managers can provide valuable insight.  The appropriate allocation of investment assets for your goals and risk tolerance is the most important component in developing an investment portfolio.  We believe that having a diversified, well-balanced portfolio, following long-term buy-and-hold strategies, and having patience, will increase the likelihood that one will achieve their long-term financial objectives.

17.  How do you select investments for a client?

Once the asset allocation is determined, the next major decision has to do with the appropriate investment vehicle.  This means choosing among individual securities (stocks or bonds), separately managed accounts, exchange traded funds, and mutual funds.  For our purposes in this paper, we will focus on mutual funds.  The majority of our clients benefit from the professional management, diversification, and efficiencies that mutual funds offer, compared to selecting, buying and owning individual stocks and bonds.  The goal of our fund research process is to establish a standing list of three to four mutual funds for each of the eleven stock, four bond, and two cash asset categories we use in planning.  In general, to make the list, a fund must have demonstrated above average performance, average or below average risk, low expenses, adherence to its stated investment style, and broad diversification.  In addition, recommended funds must be no-load and available to average investors (not limited to very high minimums or institutional accounts).  We believe in diversification among actively and passively managed funds.  As it is a matter of pure mathematical logic that 50% of actively managed investments under-perform their market indices, we are biased toward the lower costs and tax efficiency of indexing for a major portion of most clients’ investments.

There are, however, several arguments for including actively managed funds in a portfolio.  For one thing, there is some evidence that active managers can beat the market when it is on its way down.  Another argument for active management is that in less efficient markets – such as small cap and foreign markets - research is more likely to reveal opportunities and threats.  Theoretically, in more efficient markets (such as for large cap U.S. stocks) any potential competitive advantage is so quickly priced into the stock that there is less chance to take advantage.  Finally, some clients just prefer to have some money invested with an active manager who they hope can get them above-market returns.

Therefore, our screening process included two searches in all categories: one for top index funds; the other for top actively managed funds.  Which will we recommend to a given client?  The answer depends upon the client’s tastes and risk tolerance, as well as the amount of money to be invested in a given category.

If the amount allocated for the riskier classes (small cap and emerging markets, for example) is more modest, we would probably recommend indexing the large cap and developed international and using active managers for the smaller allocations.

18.  How do you price your financial planning services?

The fees are based on the actual time involved in meeting with you in person or over the phone, researching and analyzing your current situation, and providing specific recommendations and implementation assistance.  Ongoing retainer clients pay a fee which is based on the number of hours to be spent for the client during each billing period.  This, in turn, is driven by the complexity of the client’s situation and the level of support they need.  The retainer is revisited annually to ensure fairness to both the client and KFP.

19.  How much will my financial plan cost?

Fees are determined on a project basis; the total fee for a financial plan will vary from client to client based on the specific needs and complexity of your situation (please see the diagram in the Seven Steps flowchart to learn about our financial planning sequence and the client service options available).  An estimate is provided after the Get Acquainted meeting, when your personal needs are fully identified.  Once your financial plan is complete, there are three basic levels of client/advisor relationships (for more information, see the Seven Steps flowchart).

20.  Once my plan is completed, will our relationship end?

Depending on your client track, the actual engagement of services may end (please the Seven Steps flowchart), but the majority of our clients choose one of our two Continuing Client Programs. Because financial planning is a process, not an event, we offer ongoing services, periodic reviews and day-to-day consultation as requested and or needed.

21.  How can I get started?

The first step is an initial inquiry from you.  Call us at (630) 842-5609 or email us at Bill@KefferFinancialPlanning.com.  We offer an initial no-cost, no-obligation Get Acquainted meeting, either on the phone or in our office.  For Get Acquainted meetings, appointments are scheduled based on availability during regular business hours of 9-5, Monday through Friday.  Expanded office hours are available to meet special needs.  Should you decide to engage our services, we can discuss which of our services and client tracks is appropriate for you.  Most clients find the financial planning process to be stimulating and enlightening.  The end result, of course, is greater peace of mind.  We look forward to helping YOU build a brighter financial future!