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So I hope you enjoyed seeing that video that really showed a lot

of different life situations.

And as we talked about all those elements of people's goals,

thinking about retirement or thinking about helping their parents or

helping their children with college or whatnot.

All of those things are really connected and

it really takes a special person to be able to listen to those challenges,

those opportunities and those goals to really help people in a special way.

So the next question obviously is, well,

are there positions available in financial planning?

And I could tell you there are, there are a lot of them.

And Money Magazine saying that the financial planning career path is

going to grow 41% even til 2016.

We see a lot of firms who are saying we're looking to hire folks that are coming out

of places like the University of Illinois from the CFP Board program, and

are putting them into positions where they're working with clients and

developing some sort of financial plan.

So, in looking at employment opportunities personal financial advisors is by far

going to be the highest need even through 2022 compared to other occupations or

even occupations within business.

So there are indeed a lot of opportunities available.

In a lot of cases that has to do with the fact that there are a lot of Americans

are getting older and baby boomers are now moving into retirement.

And so as clients they have more needs as we talked about the needs

of clients moving towards retirement.

So there's more of a demand for financial planners and

in some of those baby boomers who were CFP professionals are retiring themselves.

So there's a huge need for this next generation for

folks coming out to go onto these positions in working with people.

The need for diversity is really important as we have a very diverse nation.

We also need a very diverse nation of CFP professionals who

can serve those clients in a competent and ethical way.

So how much does it pay to work in financial planning,

which is obviously an important question in thinking about potentially a career

in financial planning.

Well you can see here that personal financial advisors

have a strong salary compared to certainly other occupations, but

even in business and financial operations occupations.

And we're looking at medium annual wages since 2012.

So there's great opportunity and there's also great, good

salary for working with people and helping them achieve their goals and dreams.

I want you to listen just a couple of folks that are working again in this

industry who are going to talk about why they do it and

what's it like to be a financial advisor or CFP professional.

Take a listen

>> When I'm talking to a client about their life-long goals,

once we find that we're on the same page, and we know where they want to go,

what we'll do is we'll develop a plan that helps them get from point A to point B.

Oftentimes for people to think about how to get from beginning to end is

overwhelming and so we kind of create bit sized chunks for them to take a look at.

It's important, very very important, as a CFP professional that my clients know

what they're doing well and where they might be able to do some things

differently to reach those goals that are most important to them.

Together we create this plan as time goes on.

So it's a living breathing thing.

When I became a CFP professional, what was so intriguing to me was this

idea of developing lifelong relationships with clients,

around what's most important to them.

And so, the goal setting piece of my job is fantastic,

because it creates this foundation, and this Framework for

us to continue this relationship of planning and client interaction for

years to come, throughout generations even, that's often what happens.

So the plan itself often includes things like how

do they manage their investments because a lot of times that's the primary concern.

But also what do they do about their tax situation, and

their retirement planning, and estate planning, and insurances?

And some people are very charitably inclined so

how do they accomplish those goals?

So while we might not be the expert,

we're not maybe an attorney, we make sure that we bring all the right people

around the table to help a client achieve that which is most important to them.

And so we're in regular communication with our clients as well.

And that's a big part of helping them reach their life long goals.

It's not a one and done kind of thing.

So.

Our primary focus above

all else is to ensure that our clients have money for life.

And that life be it longevity or in the lifestyles that they live so

they can live the life they want to.

And I have personally found this incredibly overwhelmingly impactful.

I have cried in front of clients,

sometimes listening to their stories because they're so heartfelt and

it's this beautiful marriage between the analytical side

of my brain and the emotional intuitive side of brain.

And I don't know many other professions where

there's such a great marriage between the two and

being a CFP professional and having been in practice for a while.

And hearing tons of different stories and all these different life goals and

seeing clients actually get from point A to point Z and be happy and

celebrate with them is something that has brought me incredible joy.

The world is a very big place.

And there is a world of opportunities for investing.

And as a CFP professional what I have found is that what

diversification really means to someone is not having all your eggs in one basket.

So it's looking at the world and saying there's all these different segments of

the world and how can I invest in those areas smartly,

cost-effectively, efficiently so

that I can get the returns for the risk that I'm taking.

There is no such thing as free lunch really so if you're going to take

risk in an investment portfolio you want to make sure you have returns.

So diversification is a way to make sure that you're

taking appropriate risk and getting return for it.

So for example, if you're diversified, you don't have your eggs in one basket, right?

So you might have US large company stocks,

you might have international stocks, and you might have bonds.

That's an example of diversification.

And each one of those areas of the market have different returns, and

they have different risks.

And so when you put them all together, what you have is a portfolio

that is insulated from a single company doing really great or

really poorly and it totally wiping out your savings.

That's one benefit that you have from diversification.

It helps smooth out peaks and values of returns so

you don't feel that anxiety when you see markets go up and down, which they do.

It also really helps you to avoid missing opportunities that are out there.

If you're all invested in small company stocks and US large company stocks

are doing great and you don't have any of that, well you've missed an opportunity.

But what diversification does is it helps you capture all of that.

And a lot of people will get confused about what diversification means,

and think, well, I just have two different managers.

Or I have two different mutual funds, or ETFs, or whatever, exchange traded funds.

And that's diversification but

really that's not necessarily what we're talking about here.

What we're talking about is what the investments themselves are.

So, if you have large company stocks, small company stocks,

international large company stocks, international small company stocks.

It doesn't matter if you have the same manager, it's what those investments

themselves are that insure you don't have all your eggs in one basket.

So I went to college, I got my degree.

I sort of accidentally found my way in to financial planning.

I was more geared toward investments initially,

then I sort of navigated my way to this profession.

And it has been so meaningful for me that when I started my own firm

years ago the reason behind it was to be a beacon of light within our industry.

To be someone or some firm that the community,

that the people we serve can look up to and

say this is how you can do this business, and

build relationships, and make a difference and not always be all about money.

It's part of what we do and we help people, advise people on it,

but we're very much keyed into wanting to be

an example of how you can do a little bit different.

Being a certified financial planing professional is very rewarding,

but it's also very challenging and I love that about the business.

Starting my own firm, it was very hard.

I mean we started with nothing and we had to build it from the ground up and

to gain people's trust.

And when we were able to do that,

on client by client basis it became this beautiful tapestry

of client relationships that I couldn't have scripted out.

But it's just the way that it developed and it was hard work.

You have to know a lot about a lot of different things.

And you have to know when you don't know what you're supposed to know to bring

in allied professionals to kind of help you figure out on behalf of your client.

And keeping your clients first and

foremost in your mind has been a mantra of our firm since its inception.

>> So as a CFP professional,

we help clients each day with managing their cash flow and

managing how much they need to set aside, particularly in an emergency fund.

This is a very important piece of what we plan, especially for

younger clients who are just getting started.

It's the first goal, really, that we want them to build out,

to have that stability as they begin their career, can save a little bit at a time.

And then if something unexpected happens such as a health event, or

something happens with their car, they have the money there that it's a very easy

transition and doesn't cause a big disruption in their life to where they

have to take on something like credit card, debt, or other things that they do.

So when we talk to them, we essentially talk about two things.

The first thing is where are you going to save it?

And then the second thing is how much?

So, if we're thinking about how much for most clients, it's going to be 6

to 12 months of living expenses for them depending on the job, the stability.

Whether they're married, for example,

might be a little less because they might have a spouse who works as well.

Otherwise, if it's just one income,

it's probably going to make sense to have closer to that 12.

Once they establish that fund,

it's just important to set that aside and where's it going to go?

And so with that, as we think about it, it's an idea of because we want that to be

the stable part of what they have, we put that normally in a bank account.

Sometimes it's an online bank account where they can get a little bit

more yield.

But it's still readily available and very liquid.

They don't want to put that in a market because if something happens in a market,

one, they can lose part of that emergency fund.

Number two, when they're forced to sell they might be forced to sell at a bad time

in the market where it's down.

And it's a little bit harder for them to get that, it's a little bit less liquid.

And so we're working through those trade offs with our clients.

For older clients it's a little bit different,

most of them have that emergency fund already established.

However, when we think about cash flow there can be a little bit

different needs with where does that money come from?

So for example, we just had a client who sold their home,

are in the process of selling their home, I should say, and bought another.

Because of the way it played out, they had to buy the other before they sold their

actual home, so they had a cash need of a couple of hundred thousand in a meantime.

And for them it was looking at the options.

So essentially they had three, so they could sell it from the portfolio

which would mean taxes and trading cost, which we didn't really like that idea.

They could take off on another mortgage, for

really what was going to be a few months.

Which there's cost with getting the mortgage, and

then there's usually a higher interest rate associated with that for

the short amount of time and looking into can they pay it off early?

Does that make sense for them?

But third and what made sense was what's called a pledged asset line, so

it's essentially something that not a lot of people of think about, but

it's borrowing against the portfolio.

It was a lower interest rate for them, something that is short term so, in this

case because they only needed it for three or four months it made a lot of sense.

But saved them anywhere from 5 to $10,000 based ofo of how long they'll use

So it's very powerful for them to have the financial adviser to help them weigh, and

then give options that maybe are a little bit outside the box.

So every day that's different for us, and changes on a client to client basis.

Insurance is very important for our clients.

Risk management, they've worked their entire life to build assets,

whereas a younger person, maybe,

the most important thing in your life is your ability to work.

Insurance can cover you, and ensure that, essentially, the assets that you have

built, or your ability to work is insured, for the rest of your life.

For most of our clients, life insurance, and disability,

is the most important part to start with.

Life insurance, essentially, we're looking at a few things.

The first thing is goals for each of our clients.

What are your goals?

What do you want to do in your life?

So for some of our clients that might be college.

They need to, if one of the spouses were to pass away, they need to pay for

college.

They need to pay off the mortgage.

To be able to essentially what we're using insurance for stability and

peace of mind for the opposite spouse if something were to happen.

Hopefully, in an ideal world we'll never need it.

But a lot of the times, and in the most important times, they do need it.

And that's when the CFP professional and us comes in to talk through those

goals and to figure out what is needed, and then what is going to be there,

essentially, to be able to offset that need.

So for most people that's assets, you could sell your house.

You have your savings that can all set that need.

And anything more than a need you're going to have to make up with insurance.

And our firm what we think about is insurances purely

to insure against that risk.

It's an investment tool we want you to save and the stock market and

then the bond market depending what makes sense outside of that insurance product.

But if you need that specific insurance we want to get that to you.

So, for example if we have a client who's age 30, husband and

wife, they have two young kids, both of them working.

If the, let's say the wife in this example is to pass away.

The husband's now going to have to cover some way to care for their young children.

So, maybe, that's daycare, whereas they used to be able to split,

based off of their work schedule.

Maybe, that's college for the two kids.

I mean, they both want to go, but now they don't have that earnings to cover it.

Now he's got a mortgage to pay on his own, maybe,

they need to cover that the idea is not get rich off of insurance but

to cover what the other spouse would and to make them feel comfortable.

So that's kind of number one.

Disability insurance is a little bit different but still very,

very important especially for our younger clients.

The chance of something happened with life insurance for

you to pass away is actually a lot less than disability.

And actually is a lot more common for young clients specifically to

be disabled than your most important asset is that of you ability to work and

gain income over time and to have that disability insurance for each client and

a lot of the times that's tailored for them so they can use they only get up

to 60% of their income and so again is the same idea.

How much insurance do we need,

what assets do we have in place to essentially offset anything that we need?

This came actually one of the really that drives us home and

one of the most important examples that I have seen in our clients was we had

a client who was a physician.

He was about 40 years old, they had two young kids and his wife.

They were driving during the holidays,

it was an icy road, they went off the side of the road and

essentially got in a car accident which costs his hand to not be able to work.

As a surgeon, as somebody who is using that every single day,

depending on the type of disability you would've had,

there's essentially two time any occupations.

So if you can use go and teach even though he doesn't have that hand

it pays out nothing but in his case he had what's called own occupation,

which means he couldn't do his job, he couldn't do surgery and

because of that he was paid out for the rest of well actually

til age 65 every single month essentially replacing the salary that he had lost for

the spouse who now had to care for the husband who was trying to find work and

as a little bit more difficult now because he can't use that hand.

The financial peace of mind.

Just emotionally how much different that was for them in going forward.

It actually allowed him to really do what he wanted to in life.

And that was to go back and teach and do different things.

He could still make income, but he was getting that income stream that

essentially was the difference between what he used to make and

what he was making now because of that disability.

So each thing for our clients, like I said, is based off of goals,

their need, and making sure that they are covered In case of some catastrophic loss,

the piece of mind is really the key is we look forward and we help each client.

>> I hope that was exciting to hear from people who are really making

a difference in working with other people, and

I certainly hope that thinking about financial planning, and

thinking about becoming a CFP professional is something that you'll consider.

There's a great need for some really intelligent people who

obviously have all the content knowledge that comes with the financial planner but

also are really excited about working with people and

helping them achieved their goals and dreams.

I encourage you to visit our website at CFP board at CFP.net And

there you can look at how it works to become a CFP professional relative to

our different requirements, and certainly visited the University of Illinois,

CFP board registered program in personal financial planning.

They offer a baccalaureate program here so I encourage you to visit their page and

learn more about it.

Thank you very much.

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Lecture: Financial Planning as a Career Part Two

Financial Planning for Young Adults

Conoce a los instructores