8 Ways Financial Planning Firms in Houston Can Help

Financial planning is more than just investments. It’s more than just numbers. It’s more than just watching the stock market. Proper financial planning is really about optimizing your financial assets and resources to reach the goals most important to you and your family. Financial planning certainly includes deciding how you plan to spend your retirement. It includes the need to stay abreast of new laws that affect your finances and your plans. It’s about controlling your emotions and responding to (rather than reacting to) changes in your portfolio. This is why, if you live in Texas, financial planning firms in Houston can be so beneficial.

Let’s take a look at 8 specific ways a financial planning firm can help.

1. Keeping You Up to Date

Most people don’t have sufficient time to stay fully on top of developments that can affect their wealth. It can almost be a full-time job to monitor the markets, geopolitical events, changes to tax rules and new legislation that can affect you directly or indirectly. A financial advisor should stay in touch with relevant events and share any information that you need to know. This can help you stay focused on the important issues while filtering out what is meaningless noise. That’s a real time-saver.

2. Holistic Planning

The truth is, most people’s finances encompass many facets that should work together to help them reach their goals. This can include strategic planning for investments, retirement, taxes, insurance, estate planning and charitable giving. There also may be state and local benefits that you can incorporate, such as veteran programs or tax laws in specific states. Full-service financial planning firms in Houston can offer an all-inclusive viewpoint. 

A full-service financial planning firm should understand how each piece of the puzzle affects the overall result, using knowledge and training that most DIYers simply lack. In addition to drawing up plans, a firm should monitor your progress and suggest changes as required. For example, you might need to increase your life insurance as your household grows, and this might affect the amount you can devote to investments and charitable giving.

3. Providing Investment Ideas

A financial advisor can help you select sound investment strategies and help you steer clear of unsuitable ones. No one can accurately predict the future. It takes experience and expertise to assess the risks of investment decisions as circumstances change over time. A qualified financial advisor can properly counsel you on how to reduce your financial risks while preserving the opportunity to grow your wealth. The risk/reward tradeoff is crucial to intelligent decision-making, and a financial advisor should have the training and experience to weigh all relevant factors before recommending an investment strategy.

4. Keeping Emotion in check

Fear and greed are often the chief motivators for actions that affect wealth. A plunging market or an “opportunity of a lifetime” can cause an investor to take actions that are irrational.

A financial advisor can help prevent you from overreacting to events or attempting to out-guess a volatile market. Your wealth depends on your ability to keep your eyes on your long-term goals without undue emotion. An experienced advisor can keep you on course with rational asset allocation and diversification planning that will help you weather any financial storm. An advisor can show you when to cut your losses and when to stay invested. In the long run, this can help protect your wealth against precipitous actions.

 

Talk with a professional. Schedule a no-strings-attached meeting with the staff at Linscomb & Williams to see if we’re the right fit.

 

5. Retirement Planning

Retirement planning has several components. First, it’s important to establish a monthly goal for socking away money for your retirement nest-egg. Defining the proper goal requires careful analysis and sophisticated projections. Of prime importance is saving enough so that you don’t outlive your money. Most people would like to have a comfortable retirement without inordinately sacrificing their current lifestyle.

Second, it’s important to decide what types of retirement accounts to use. These include IRAs (Traditional and Roth), 401ks, variable annuities and trusts. You may also consider your house in your retirement planning, as it may appreciate over time. When you retire, you may want to relocate to a smaller house (or even an apartment) and harvest some of the equity you’ve built up in your home. Much of the profit you make on your house may be sheltered from capital gains tax. An advisor can work the numbers for you well in advance of retirement.

6. Tax Planning

As your wealth increases, the opportunity to benefit through the U.S. tax system expands. For better or worse, there are many loopholes in the system that allow you to shelter more of your income through various strategies. Some might be quite familiar, such as owning municipal bonds and Treasury debt. But you might not be aware of others, such as tax-efficient exchange-traded funds, oil and mineral rights, REITs and sophisticated trust planning, to name a few.

There can also be local benefits you may qualify for. Again, if you’re living in or planning to relocate to Texas, working with financial advisory firms in Houston can help explain the pros and cons of each option and help you decide which ones make the most sense for your unique situation.

7. Estate Planning

Estate planning allows you to develop an intelligent plan for how your property will be distributed after you pass away. Safeguarding your wealth for your heirs is the reason you perform estate planning.

Although this might seem like a daunting task, a financial advisor can help you understand how to proceed. When done properly, an estate plan can control who will receive specific parts of your estate while possibly reducing your taxes now and later. Estate plans can include both wills and trusts. Both options provide specific advantages and drawbacks, which is why you might need both to accomplish your goals. Family dynamics, your preferences and your unique situation play a role in the form and content of your estate plan.

It is important to avoid mistakes regarding the titling of assets held individually in order to ensure a seamless process when your estate is settled. You should be able to count on a full-service financial planning firm to supply the knowledge crucial to optimal estate planning.

8. Figuring Your Insurance Needs

Insurance often plays an important role in your overall financial planning. A financial planning firm can help you decide the types and amounts of insurance you need. But make sure you talk with a fiduciary when discussing insurance needs. It is important to obtain advice that is not colored by a desire to sell you particular financial products. 

Life insurance is key for protecting your family should something happen to you. A fiduciary can help you determine how much life insurance to buy and what form it should take, without the conflicts of interest associated with product sales. Term life insurance is the cheapest, but other forms, like universal and whole life, can offer some long-term advantages. In addition to life insurance, there is insurance for long-term care, health, property and casualty, disability, liability and more. Each has a role to play, and a fiduciary can help you establish an optimal insurance plan that’s right for you.

Conclusion

Working with a financial planning firm can help you make informed decisions about your money, help you decide how much to keep in an emergency fund, the rate of return you should require on your investment, how to handle your mortgage and how to optimize your charitable giving among many other things. Before selecting an advisor, do your homework. Check out the firm’s credentials, education and business practices, including how the firm charges for services.

Choosing the right advisor is a big decision, so do it carefully.

 

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J. Harold Williams, CPA/PFS, CFP®

J. Harold Williams, CPA/PFS, CFP®

J. Harold Williams is Linscomb & Williams' Managing Director, Chief Executive Officer and Chairman.

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