Advising the Advisors: Financial Planning for Professional Services

Advising the Advisors: Financial Planning for Professional Services

You’ve probably heard the saying, “A lawyer who represents herself has a fool for a client.” In a similar vein, no surgeon would attempt to operate on himself. In other words, persons in professional services who are paid to provide advice and guidance in specific areas—attorneys, CPAs, architects, and others—can typically benefit from having someone to guide them in designing and executing their long-term financial plans.

This is true for all career phases, by the way. For those young, entrepreneurial professionals who are establishing their practices, a financial advisor can offer invaluable assistance with assessing the owner’s “money personality,” financial risk tolerance, and calibrating the optimal asset mix for the portfolio within the context of the owner’s personal and professional goals. For the mid-career professional, a qualified, fiduciary financial planner can offer advice about children’s educational funding, enhanced retirement planning, or personal and employee compensation and incentives. For the mature professional who is approaching retirement, the financial advisor can help with considerations around the funding of succession plans, charitable or philanthropic initiatives, and retirement lifestyle decisions and alternatives.

One of the most important roles a financial advisor can fill for professionals is as a conduit to other professionals. Because most advisors place a tremendous value on their ability to help their clients access experts in legal, tax, and other matters, they can be very beneficial as “relationship brokers” to professionals who may need or be interested in accessing specific professional expertise.

They can also offer practical guidance on day-to-day matters such as cash flow planning, tax-efficient investments, and debt management. In fact, attorneys, in particular, may find themselves turning to a trusted financial advisor for advice in client-related matters such as the financial implications of divorce, business reorganization, or estate planning.

Financial advisors are also trained to pay attention to the overall structure of their clients’ businesses and other income-producing activities in order to help mitigate risks, which can arise from over-exposure in a particular asset class or type, the nature of the professional’s activity, or other causes.

When the time comes for professionals to begin considering what happens to the firm after they retire or take a less active role, a financial advisor can offer useful perspectives. Whether you are considering an internal buyout, changes in the firm’s liquidity structure in preparation for an exit, or preliminary succession planning, a fiduciary financial advisor can provide perspective that will help you tailor the plan that is the best fit for you and your future plans for the practice.

At JFS Wealth Advisors, our greatest strength is our deep knowledge of each client’s needs and goals. We work with attorneys, CPAs, and other professionals to develop employee benefit programs, retirement accounts, and other financial tools that can help build foundations for greater success. To learn more, read our recent article, “Passing the Torch: Estate Planning Considerations for Business Owners.

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