Navigating Your Financial Journey: A Guide From 26 Years of Experience

Building a Solid Financial Plan: Insights from History to the Present

As a seasoned Financial Planner and the Founder of Tomren Wealth Management, I reflect on the 26 years we’ve spent helping clients navigate the complexities of financial planning. With October marking Financial Planning Month, there’s no better time to pause and share insights. Surprisingly, not many people are well-acquainted with the rich history behind financial planning or even how to select a good planner, let alone know what to expect along the journey. My team and I have had the privilege of crafting financial plans tailored to our clients’ unique needs and dreams, and it’s from this wellspring of experience that I’d like to share with you. Whether you’re just starting your financial journey or are well on your way, I hope this guide provides valuable insights, encouragement, and direction.

A Brief History of Financial Planning

Financial planning as a formal practice can be traced back to the early 1960s. With the burgeoning complexity of the financial markets, changing taxation laws, and an increased emphasis on personal financial responsibility, there was a growing need for expert guidance. This led to the formation of the International Association for Financial Planning (IAFP) in 1969 and the profession’s growth.

In the U.S., about 31% of households utilize a Financial Planner, according to a Certified Financial Planner Board of Standards survey. With more than 285,000 Financial Advisors operating across the country, there’s clearly a recognized value in professional financial guidance. People seek financial planners for various reasons, from managing investments to planning retirement, tax and estate planning, education, and more.

What Makes a Good Financial Planner or Firm

Choosing the right Financial Planner or firm is like crafting a personal relationship; it requires trust, understanding, and empathy. Imagine walking into the office of a planner for the first time. Here, you’re sharing numbers, dreams, fears, and expectations. The planner attentively listens, asks thought-provoking questions, and works to understand your unique financial situation, risk tolerance, and goals.

The relationship deepens as the planner crafts a personalized plan for you. It could involve investing, budgeting, insurance planning, and more, each element meticulously chosen to align with your life’s objectives. It’s not a one-time event but an ongoing process. The planner monitors market trends and account performance daily, ensuring everything aligns with the strategy. They may make subtle adjustments monthly, while a quarterly comprehensive review ensures everything is in harmony with your long-term aspirations.

Fee structures and fiduciary status are also essential considerations. Some planners charge based on the assets under management, others hourly, while some might earn commissions on products sold. Knowing these details and whether the planner adheres to the fiduciary standard of acting in your best interest can greatly influence your choice.

In the relationship with a good financial planner, you’ll find a guide, a confidant, and a partner in your journey toward financial well-being. This relationship might start with numbers but flourishes through genuine care and expert guidance tailored to your unique needs and dreams. At the end of the day, what sets a good Financial Planner or firm apart isn’t merely their ability to manage wealth but their character, integrity, and dedication to helping clients realize their financial goals.

Key Lessons in Building a Financial Plan

• Understanding Your Goals

The journey toward financial success begins with a clear understanding of your goals. Imagine sitting down with your planner and not just discussing numbers but painting a vivid picture of your dreams and aspirations. Whether buying a home, funding your children’s education, or traveling the world in retirement, your planner translates these dreams into a concrete financial strategy. This initial conversation sets the stage for everything that follows, turning abstract wishes into achievable milestones.

• Creating a Realistic Budget

Once your goals are defined, the next step is creating a realistic budget. Your planner helps you navigate the maze of income and expenses, showing you where to save and where you might need to adjust. It’s like crafting a tailor-made suit; it must fit your lifestyle and goals perfectly. Together, you and your planner develop a practical and aligned budget with your financial aspirations, making the path to success much smoother.

• Investing with Purpose

Investment is not just about chasing returns; it’s about aligning your financial resources with your unique goals and risk tolerance. Your planner is like a seasoned captain guiding a ship, knowing when to take risks and when to be conservative, always keeping the destination in sight. Regular reviews and adjustments ensure that your investments stay on course, weathering market storms and capitalizing on opportunities. This ongoing dialogue and partnership with your planner ensure that your investments are not just growing but growing in the right direction.

• Planning for the Unexpected

Life is filled with surprises, and not all of them are pleasant. Your planner helps you prepare for these unexpected twists and turns, discussing insurance, estate planning, and emergency funds. It’s like building a safety net, giving you peace of mind to pursue your dreams without constant worry. This part of the conversation may include some complex topics, but it’s essential to ensure that you and your loved ones are protected, no matter what life throws your way.

• Regularly Reviewing Your Plan

A financial plan is not a set-and-forget document; it’s a living, breathing roadmap that evolves with you. Regular reviews with your planner are like periodic check-ups with a trusted doctor, ensuring financial health is thriving. Whether it’s a new job, a growing family, or a sudden windfall, life changes, and your financial plan must adapt accordingly. These ongoing conversations with your planner ensure that your financial strategy aligns with your life, keeping you on the path to success.

Building Trust with Your Planner

• Open Communication: Share all relevant financial information.
• Active Participation: Engage actively in the planning process.
• Trust but Verify: Regularly review statements and ask questions.

Action Steps and What to Look for in a Planner.

Embarking on the journey towards financial well-being is not a future endeavor; it begins today. Imagine yourself taking those vital steps by identifying your clear and realistic goals. Are you dreaming of early retirement, purchasing a home, or starting a college fund for your Grandchildren? Whatever your dreams may be, clarity is your starting point.

Next, consider speaking with a Financial Planner. Even an initial conversation can illuminate your path, providing valuable insights that only professional experience can offer. It’s like having a seasoned traveler guiding you through an unfamiliar landscape. They’ve been where you’re going and know the way.

Starting an emergency fund might seem like a small step, but it’s crucial. Think of it as building a financial cushion to face life’s unexpected challenges without derailing your long-term plans. It’s not merely about saving money; it’s about creating peace of mind.

When looking for the right financial planner or firm, consider it akin to finding a trusted friend or partner. Of course, their credentials and experience matter, but so does their fiduciary status. Will they act in your best interest, or are they motivated by commissions and fees? Understanding their fee structure and whether they are bound by fiduciary standards is like knowing the rules of engagement; it sets clear expectations and boundaries.

Finally, never underestimate the importance of personal connection. You should feel comfortable, understood, and respected. It’s a relationship that might last for decades, guiding you through life’s various stages. It’s not just about numbers and charts; it’s about shared understanding, empathy, and collaboration.

So, as you stand at the threshold of this exciting journey, know that the path is clear and the steps are within your reach. The world of financial well-being is not a distant dream but a tangible reality that begins with these thoughtful and deliberate actions. The right planner or firm is not just a guide, but a partner in this adventure, and the character, trust, and understanding they bring can make all the difference in your success.

Michael Tomren is a Financial Planner with Tomren Wealth Management in San Ramon, CA. Tomren Wealth Management is a Team-Based Wealth Management firm specializing in Investment Planning, Retirement Planning, Tax Planning, & Estate Planning. For more financial education or to speak to someone about your financial plan, visit https://www.tomrenwealth.com.

12667 Alcosta Blvd., Suite 355 | San Ramon, CA  94583  |  800.480.8740  |  info@tomrenwealth.com |  www.tomrenwealth.com

Michael Tomren is a Financial Planner with, and securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC