Financial Advisor Canton Ohio
What are the differences between investment management and comprehensive financial planning?
Canton is located in Stark County in Northeast Ohio, about 60 miles south of Cleveland. The Greater Canton metropolitan statistical area, consisting of primarily Canton, North Canton, Massillon, Jackson, Perry, and Plain Townships, has a population of approximately 404,422 and spans two counties which include Stark and Carroll.
Initially known as a center of heavy manufacturing, Canton’s economy has diversified in recent years, with service industries such as education, finance, retailing, and healthcare now prominent employers in the municipality.
Canton is perhaps best known as both the birthplace of the NFL and home of the Pro Football Hall of Fame. It is also home to the William McKinley Presidential Library and Museum, which commemorates the life of the country’s 25th President, who had a home in Canton.
The city features a growing arts district in its downtown area, where a number of historic buildings have been converted to lofts, bringing residents and associated businesses into the area.
If you are looking for a financial advisor in the Greater Canton, OH area, there are a variety of factors to consider. Broadly speaking, these involve both the way the advisor does business (fee-based or commission-based, holistic or transactional approach to financial planning, etc.) and the advisor’s qualifications. Is he or she a CERTIFIED FINANCIAL PLANNER™ Professional? Do they have relevant experience and other certifications in the field such as a CRPC®, CFS®, CPA, MBA, etc.?
If you are seeking an advisor strictly to provide advice about what stocks to buy or how to set up a retirement or other type of account, with no need for help with comprehensive goal-oriented financial planning, a transactional, commission-based advisor may be a consideration.
On the other hand, if you are looking for an advisor who will help you build, implement and monitor a plan designed to help you improve your overall financial situation and reach your financial objectives, a fee-only advisor who offers planning services that are holistic, comprehensive and customized offers the best fit.
Some questions to ask to determine if an advisor falls into this latter category include:
- Are you a fiduciary?
- Are you fee-only?
- Do you offer comprehensive financial planning?
- Do you take a holistic approach to financial planning?
- Do you offer tax consulting?
- Do you offer customized financial plans?
- What is your experience in the field and what relevant certifications do you have?
While many financial advisors tout their investment management services, it is important to understand the differences between investment management and comprehensive financial planning when looking for an advisor who is right for you.
The key distinction between the two is that investment management is just one part of the overall financial planning puzzle. A comprehensive financial plan does incorporate a strategy for managing your investments, but its scope extends much further than that. The process typically looks at your overall financial situation in order to design strategies to optimize your finances and improve your ability to meet your financial goals.
In addition to investment management, other areas comprehensive financial planning may cover include:
- How much can you afford to set aside in savings to help fund your financial goals?
- How likely are you to achieve your financial objectives given your current savings rate and projected investment performance, and what changes, if any, should be considered to improve your chances of reaching them?
- Have you taken the necessary steps (such as acquiring insurance and building a cash reserve) to protect your income and assets in the event of an emergency?
- Have you structured your accounts and any insurance so that your assets will be distributed according to your wishes when you are gone?
While the investment management process usually factors in your risk tolerance, it typically doesn’t involve an overall analysis of how realistic your financial goals are and whether you will need to make lifestyle changes to boost your chances of achieving them.
As a result, just focusing on investment management can be harmful to your ability to reach your financial goals. For instance, while your investment management strategy may produce good results, if you haven’t calculated how much you will need to invest to reach your financial goals, you may still find yourself short of the mark when it comes to saving enough to fund them.
Saving for retirement is an example of an investment objective that can be difficult to achieve unless you have taken into account a variety of factors including:
- What type of lifestyle do I want to live in retirement and how much do I need to save to be able to afford it?
- What type of returns do I need to meet my goals?
- What type of investment approach best fits my risk tolerance, while still being sufficient to help me achieve my objectives?
The Covid-19 pandemic has increased the pace of the migration of business functions online, and financial planning is no exception. While most financial advisors offer online account access and reporting, some investors dispense with human financial advice altogether and use what are known as “robo” advisors. While these services can provide automated portfolio management services based on an investor’s risk tolerance, they do not offer comprehensive financial planning.
A key reason for this is that comprehensive financial planning does much more than take into account the past performance of different investment sectors and project that performance into the future for portfolio allocation purposes, the key service offered by robos, when designing a current investment portfolio.
Comprehensive financial planning involves looking at your overall financial situation and investment goals and using that picture to holistically make plans for your financial life – not just to try and optimize your investment strategy.
Robos can invest your funds and rebalance your portfolio periodically according to an automated investment strategy, but they aren’t well suited to analyzing your personal financial situation to see where improvements can be made. Questions such as whether and how to buy a new car or a house, contribute to a retirement plan, take a new job, or start a new business are better addressed by a human financial advisor.
Evaluating how each aspect of your financial plan affects other elements, and your strategy as a whole requires a nuanced understanding of each piece of the puzzle. Because it involves analyzing a variety of quantitative and qualitative factors, this type of analysis is beyond the scope of a robo.
Certainly, you could access a variety of planning tools in addition to using a robo to try and build a holistic financial strategy yourself. However, given the time, effort, and expertise it would take to do so, many people prefer to work with a financial advisor as a more efficient way to engage in comprehensive financial planning.
Given the challenges involved in making financial plans in today’s volatile economy, many people choose to work with a financial advisor to improve their chances of successfully navigating complex financial markets and reaching their financial goals. While this can be accomplished over the internet, there are good reasons to work with a financial planner who is near you and who you can meet in person.
One reason for working with a local advisor is that he or she is more likely to be familiar with local factors relevant to the planning process such as retirement plan types, local economic conditions, taxation, etc. While any advisor in the state would likely be familiar with state tax policy, working with a local advisor makes it may be easier to meet your advisor in person.
Building a business relationship with an advisor you can meet in person helps make sure that everybody is on the same page with regard to your financial plan, its implementation, and periodic reviews of your progress towards meeting your financial goals. An advisor who is near enough to you that you can meet in person on a regular basis is more likely to fully understand your objectives, boosting their ability to help you build a plan to attain them.
Why is this in-person element vital to the planning process?
The reason being able to meet your advisor from time to time is so important is that it helps with the qualitative portion of the planning process. Meeting your advisor in person helps you build a relationship based on mutual trust – something that is much more difficult to accomplish when you only meet online.
Additionally, it helps establish a rapport that can enable your advisor to get a better sense of what is most important to you in the financial planning process. At an in-person meeting, it is easier for your advisor to judge what questions to follow up on, which of your financial goals are most important to you, and how to best communicate the complexities of the financial planning process.
The benefits of a comprehensive financial plan are clear: it enables you to take into account all relevant parts of your financial life in order to optimize your planning. Because each aspect of your planning can affect the overall plan, such an approach helps you avoid negatively impacting other portions of your plan when any one element doesn’t go as expected.
For instance, if you plan to retire at a certain age but need to raid your retirement accounts a few years before that time to make a down payment on a house, pay for a child’s college education, or some other expense, it can seriously disrupt your ability to retire when you expected. Comprehensive planning helps you avoid such a scenario by giving you time to prepare in advance. This could involve taking precautionary steps such as setting aside funds for emergency spending needs or setting up a separate savings account or fund for retirement, college education, or buying a house.
So, what are the components of a comprehensive financial plan? They typically include all or some of the following:
- Goal setting and monitoring: When setting goals, it is vital to consider all of them as a whole, in addition to individually. This enables you to prioritize your funds effectively and efficiently between multiple objectives. A key tenet of comprehensive planning is that after a plan is implemented its progress must be monitored on an ongoing basis. This is crucial as a means to verify that your progress towards your goals is as expected, and also because goals may change. Investment conditions may change as well, potentially requiring a reevaluation of your investment strategy.
- Budgeting and cash flow management: Funding your goals requires positive cash flow, which, in turn, requires budgeting. To plan comprehensively involves both drawing up a budget and maintaining the focus and discipline necessary to stick to it. This attention to cash flow management is essential to fund your long-term goals – without it, your chances of achieving them decrease significantly.
- Investment management: In today’s volatile markets, investment management is a crucial pillar of comprehensive financial planning. Not only should your investment plan be tailored to optimize your chances of reaching your investment objectives while taking into account your risk tolerance, but it should also be adaptable. When financial conditions change, an adaptive investment plan enables you to make asset allocation changes as necessary.
- Asset and income protection (insurance): As discussed in more detail below, taking the necessary precautions to protect you and your loved ones’ financial future can be accomplished by acquiring insurance of various types.
- Tax planning: The taxman takes a significant chunk of Americans’ incomes. As a result, analyzing your income and investments for ways to reduce your tax burden is an important part of the financial planning process.
- Estate planning: A comprehensive financial plan typically includes planning for the disposition of your assets to your chosen beneficiaries according to your wishes.
When selecting a financial advisor, one of the key questions to ask is if the advisor is considered a fiduciary. This is crucial because fiduciary advisors are required to put the client’s best interest first at all times when providing financial advice. Advisors who are not considered fiduciaries, typically those who are compensated mainly via commissions, are held to the less exacting “suitability” standard, which only requires them to consider whether a recommendation is suitable for a client, rather than if it is in their best interest.
Historically, the suitability standard can lead to a conflict of interest when an advisor, registered representative, or stockbroker earns income by making trades whether or not they are beneficial for the client. This can incentivize an advisor to “churn” an account, trading for the purposes of increasing their compensation rather than because it is in the client’s best interest.
Fiduciary advisors typically, although not always, are compensated on a fee-only basis, removing any incentive to churn or overtrade a client’s account. This helps better align an advisor’s compensation with your goals, as the advisor’s continued employment is linked to providing you with good advice on an ongoing basis.
A true fiduciary would always act in your best interest. Fiduciaries are required to provide full transparency behind every decision and recommendation. Investors should do their due diligence before partnering with an advisor by ensuring the person they work with is a fiduciary. By first understanding what a fiduciary is, and also by asking their advisor if they are a fiduciary.
Recent decades have amply demonstrated the need to be prepared for changing economic and market conditions by building a financial safety net. From market downturns to the recent pandemic, emergency planning to prepare for unexpected events has only become more important.
When you add in the potential for unexpected personal or family-related events that may call for emergency funds, it becomes even clearer that making sure you have a financial safety net in place is vital to protecting your finances. This financial safety net should cover both your own financial security in the case of an emergency and that of any family members or dependents who rely on you for support.
The major factors to consider in this process include:
- Cash reserve: While there are common guidelines such as saving six months’ worth of salary as a cash reserve, at the end of the day, this figure should be guided by your unique circumstances. For instance, if you work in a field where extended layoffs are common, having a larger cash reserve would be appropriate.
- Insurance: Whether you purchase disability insurance to protect your income in case of an accident, or life insurance to protect your loved ones, insurance can provide a large benefit for relatively modest payments. While each individual’s approach to the question of whether to acquire insurance and how much to obtain if they do will differ, the common denominator is that health, disability, and life insurance can provide peace of mind and significant financial support to protect you and your loved ones from accidents or unexpected events.
- Risk management: Investing for retirement and other objectives involves taking into account your risk tolerance as well as your financial goals. Comprehensively managing risk involves considering risk as a whole – investment risk, risk of injury or other accident, employment risk, inflation risk, etc. Actively managing risk requires analyzing both the macroenvironment (the stock market, interest rates, economic conditions) and microenvironment (risk to your employment, portfolio, and property), and being proactive about protecting yourself and your loved ones from these risks as much as possible.
Whether you are looking for help devising a financial plan or want assistance in evaluating an existing plan or strategy, McGervey Wealth Management can help. We offer comprehensive financial services covering the full range of the planning spectrum.
We help you answer a series of fundamental questions designed to enable you to achieve your financial objectives, including:
1) Who are you?
2) What do you want?
3) How can you get there?
4) Where are you on your journey?
We help you with all aspects of the financial journey, including:
- Goal identification
- Plan development
- Strategy selection
Modern financial markets can be highly volatile. Coupled with a rapidly changing economy, this makes financial planning a moving target – a task requiring an intense focus on both macroeconomic and personal factors. At McGervey Wealth Management we translate our financial insights into actionable opportunities designed to help our clients meet their objectives. We believe that transparent communication is essential to the advisor/client relationship at every step of the financial planning process.
We offer fiduciary, fee-only financial planning services. We are committed to making the complex simple so that our clients can clearly see the financial road ahead of them. We take a holistic approach to help our clients build totally customized plans.
Our team has the following designations:
We inspire clients to make informed decisions through communication, education, and service that exceeds their expectations. We offer:
- Relationships Grounded in Financial Planning
- A 4 Step Full-Cycle Investment Process
- Proactive Client Experience
- Fiduciary Duty & Straightforward Fees
Our investment management services take an adaptive, research-oriented approach:
- Identify Macroeconomic Environment.
- Haystack with the Most Needles: Determine Sectors, Styles, and Regions that should benefit the most and ones to avoid.
- Security Selection within the above Sectors. Strong fundamental characteristics –best in class.
- Dynamically manage the process. Actions are made weekly based on the actual market environment and fundamental realities. Removes Emotion – Decisions are made on reason and not speculation about what someone thinks may happen.
To learn more about the financial services we offer, contact us today to schedule a no-obligation complimentary consultation.
By working with a fiduciary like McGervey Wealth Management, you can be assured you’re getting investment advice from a firm that has the obligation to disclose conflicts of interest and put your interests ahead of its own. We get to know you on a personal level and keep things simple, using common language everyone can understand. To learn more about McGervey Wealth, contact us today or get your wealth score to see how you stack up for retirement.