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The art of financial planning

Wikipedia defines financial planning as “a comprehensive evaluation of an individual’s current pay and future financial state by using current known variables to predict future income, asset values and withdrawal plans”. This definition, while technically correct, is almost unbearable to read, even for a financial planner. Financial planning is not about picking the right stocks or bonds. Rather, it’s about recognizing that in life we have two primary finite resources and they are time and money. Determining how to best maximize them is the ultimate goal.

So, is financial planning an art or is it a science? Financial planning could be considered an art that uses scientific tools. As a financial planner, I love getting to know my clients as people with their hopes, dreams and fears. It allows me to use advanced techniques to find the best solutions for them.

Financial planning combines interpersonal skills and intuition with financial theory mixed in with a lot of applied knowledge. A good financial planner helps provide a framework for answering those difficult questions and navigating the financial complexity that oftentimes comes with becoming a millionaire.

When seeking a financial planner, here are some of things you should look for in that person:

• They should be certified.

• Experience: Your potential financial planner should be able to provide proof that they know what they’re doing.

• Fees and conflicts: Identify how they are compensated. This should give you a better understanding if they’re paid by fees only or if compensation should be factored in.

• Standard of care: Take a look at the track record of the company for which the planner works. Be sure to check their background. Your financial planner should be able to devote adequate time and energy to each client.

• Working relationship: Similar to the previous requirement. Before you sign on the dotted line be sure to understand how often you’d be able to meet or interact with your planner.

Financial planning is not the end, but rather a means to an end, and this is precisely why the art of financial planning matters.

Financial planning has been an aspect of finances from the very beginning. But, the relatively recent designation, according to the Certified Financial Planner Board of Standards in Denver, indicates that there are more than 94,000 certified financial planner (CFP) certificants worldwide. In The Bahamas there are about 150 CFPs who can give valuable advice. As the demand rapidly increases worldwide, we in The Bahamas will follow suit. More and more people are getting more financially conscious due to the national narrative and genuine desire to be financially comfortable. The financial literacy of a country is paramount to its overall success.

• Quinton C. Lightbourne is a certified financial planner with the Chartered Institute of Bankers in Scotland and vice president of the Bahamas Investments & Securities Business Association (BISBA). E-mail:

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