The role of the financial planner has evolved over the last ten years from a product-transaction oriented approach to a consultative values-based approach. We no longer are the bearer of knowledge for our clients: at a click, if they so desire, the client can obtain information on products, companies and the financial planner.

Our role is to integrate the information the client has obtained and knowledgeably guide them toward a clearer understanding of the products available, and if suitable for their risk tolerance, time horizon, and objectives. We must be the financial problem solver for our client, allowing them to focus on solving other life concerns.

All through this Life Planning Process, we will uphold:

• Integrity – We will be honest and maintain open lines of communication. We will never make recommendations for our own personal gain.
• Objective Analysis – We will always remain a professional and never allow our personal biases to be a part of your plans.
• Fairness – We will disclose any relationship that may be a conflict of interest and possible obstacle toward your goals.
• Confidentiality – Our firm respects the privacy of any non-public information that clients provide in order for us to open and service their accounts. We are committed to safeguarding that information by holding it in the strictest confidence.

Steps We Will Follow:

• Establish Relationship with Client and Build on Financial Planning Team: coordinated efforts of other expert team members-Attorney, CPA, Third Party Administrator, Mortgage Broker
• Gather Information (Fact Finder)
• Identify Needs
• Develop Plan
• Monitor Plan
• Modify Plan (as a result of changing life events)

Areas We Will Address:

• Immediate Needs – cash reserves, debt management, credit concerns, preparing a budget, tax issues
• Risk Assessment – life, disability, health, long term care insurance
• Accumulation – investment needs, children’s education, 529plans,Coverdell ESA’s, UGMA accounts, financing for a new home
• Distribution – required income needs at retirement and available resources, Social Security, Medicare, other government programs
• Estate Planning – wills, trusts, survivor benefit planning, pension maximization, business continuation, probate avoidance, gifting, estate settlement costs, generation skipping transfers

Our Considerations:

• Plan development will be a process with consideration to the client’s risk tolerance, suitability, time horizon and objectives.
• Modern Portfolio Theory * – where the measurement of risk is through the diversification of the portfolio and not one component of the portfolio
• To educate the client on the relationship between the portfolio’s rate of return and the client’s acceptable risk
• The relationship between time horizon and risk variability (standard deviation) and the effects of adverse conditions, life events, liquidity needs in relation to that volatility
• Correlation – the interaction between two funds and degree of movement - A correlation of (1.0) indicates the funds move in the same direction, thus behave as a single asset

Some of the Analytical Tools We May Use in Developing Your Plan

• InvestmentView – Program through Thomas Reuters-an independent information service
• Valueline – Value Line Investment Survey is a comprehensive source of information and advice on approximately 1,700 stocks in 98 industries, the stock market, and the economy
• Cadaret Grant Website
• Financial Planning Association Publications

Readings

1. Investor Bill of Rights
2. Pershing LLC and the Protection of your Assets
3. Cadaret Grant & Co. Inc. Client Brochure

Please contact Mark Catanese should you have any questions, or would like to set up an appointment for a free financial assessment.

 * Harry Markowitz, “Portfolio Selection,” Journal of Finance, 1952.