By Jessica Lanning, JD, CFP®

July 5, 2022

There’s a line from the 1964 film Zorba the Greek, where Zorba (played by Anthony Quinn) upon asked if he is married, replies, “Am I not a man? And is not a man stupid? I am a man, so I’m married. Wife, children, house – everything. The full catastrophe.” It’s intended as a joke…. Laugh.

If you’re engaged in your own “full catastrophe,” it’s now time to tackle the grown-up checklist that comes with it: financial planning, taxes, estate planning, buying insurance, perhaps running a business.

Sure, you can do it all yourself, most likely to your own peril. Or, hire help.

Who To Hire and When

The following is a list of experts who can assist you with making sure your bases are covered, your affairs are in order, and confirm along the way that things are running smoothly. In most cases, the adage that you get what you pay for is true. Don’t overpay, and certainly hire wisely.

Hazard insurance agent

What this person does: They help you find homeowners’, renters’ or auto insurance. They also insure boats and RVs. They can also help you determine how much of an umbrella policy you need.

When to hire: You probably already have an agent if you’re a licensed driver with a car. Then, add on more policies as life changes and you need them — when you’re buying a home, after your first child is born (or when you become a pet parent/custodian), when you buy that boat or RV, or when you start using your car for business purposes.

Why you want a professional: Advertising suggests that you should choose your insurance agent based on the premiums (price) of the policy. Wrong. What’s more important is hiring an agent/company who is going to be there during the claims process should you have a loss.

Those people are truly worth the price differential. They will lower your anxiety and hold your hand along the way.

Also, if you have most/all your policies with one agent/company, you will get a multi-policy discount, and even more importantly, that agent can identify any gaps in coverage. The last thing you need is to think you’re adequately covered and not be.

Tax Preparer/CPA

What this person does: This person helps you with your taxes, including preparing and filing your tax return. This person should also do tax planning with you to minimize taxes both now and in the future.

When to hire: You can probably do your own taxes if you are simple — that is, you have a salaried job with a bonus, own a home, and have a spouse and kids. Once you get more complex — have stock options, investment property, own a business, etc. — you need to hire help. You will work with this person at least twice a year and probably more often.

Why you want a professional: Being successful financially is about making and saving money but it’s also about not losing money. Taxes are typically the biggest line item in a household spending plan (budget). Preparing taxes is as much of an art as it is a science. Lowering your tax bill means having more money to save or spend on other things. Staying within the good graces of the IRS is a good practice. Having an advocate should the IRS come calling is critical.

Life insurance agent

What this person does: This person helps you choose a life insurance policy and/or annuities that meet your needs

When to hire: When you have people depending on you financially, such as a spouse or child. You may also want to consider buying life insurance if you have significant debt, such as a mortgage or student loans.

Why to hire a professional: When you’re getting started in life, a simple term policy may be all that you need and can afford. You need someone who can determine how much that should be and explain to you other options as your income increases and your life gets more complex.

Permanent life insurance allows you to build an asset that you can use for a variety of reasons in a cost-effective and tax-efficient way that can be of a huge benefit to your family. It’s going to look pricey.  Someone is going to tell you to “buy term and invest the rest.”  Careful.  Do not overlook its opportunities.

Estate planning attorney

What this person does: This person helps you plan for the distribution of your assets should you become incapacitated and after you die. This might include creating a will, living trust, health care directive or powers of attorney. There’s no worse intersection on this planet than death, family, and money. Having the proper documents in place will save your heirs time, money, and anguish. It’s a great act of love to your family to get this done.

When to hire: After you’ve accumulated assets (a house, savings, retirement accounts, investments), gotten married, or if you have minor children. You should also consult with an estate planning attorney if you’re in a second marriage and have children from a previous marriage.

Why you want a professional: Sure, you can do this online or use your company’s legal support benefit. Nothing, however, will replace personalized attention and making sure these documents reflect the most recent laws, conform to your wishes, and actually get completed.

Business attorney

What this person does: This person helps you with the legal aspects of running a business, such as incorporation, contracts, and leases, preparing a business for sale, and keeping employment and legal issues to a minimum. These people typically work with lots of other business, and the “cross-pollination” of advice from one to the others is invaluable. They can keep you out of trouble and in a creative, profitable trajectory.

When to hire: When you’re starting a business. If this person cannot scale with you as you grow, you’ll need to hire another one who can handle more complex issues as the business gets bigger.

Why you want a professional: Again, you can do business formations yourself, but you will learn little from the process that will need to be repeated, the cost to set up a business is not that high, and you want to build the ally. Business owners tend to see their attorney as a partner in their success. Don’t deny yourself that support.

Financial planner

What this person does: This person helps you plan for your financial future, which might include saving for retirement, investing, buying insurance or paying down debt.

When to hire: When you have specific financial goals you want to achieve, such as saving for retirement or college, or when your finances get so complex that you need the additional set of eyes and brain cells.

You might also want to consult with a financial planner if you receive a windfall (inheritance, bonus, etc.), or experience a major life change.

Why you want a professional: Unless you want to spend your free time becoming a financial planner so you can do everything yourself, get someone in your corner to help. A financial planner can also be your “general contractor” to hire all these other experts as “sub-contractors.” Financial planners are excellent at identifying who you need to hire and when. As your assets grow, that person can be making mid-flight corrections with you and increase the chances of your financial success.

Social Security and Medicare specialist

What this person does: This person helps you understand how Social Security and Medicare work, and how to make the most of these government programs.

When to hire: If you become disabled, when you’re 60 years old and probably again at 64 years old. and want to know how to maximize your benefits under both programs that makes sense for your particular situation.

Why you want a professional: The rules for Social Security and Medicare are Byzantine, ever-changing, and there are lots of ways to “game” the system. You want someone who knows how to do that so you don’t have to and can get the most out of these programs. This is particularly true if you are married.

Elder care/long-term care specialist

What this person does: This person helps you plan for the care of your or an elderly family member, which might include in-home care, assisted living or a nursing home.

When to hire: When you have an elderly family member who needs assistance with activities of daily living, such as bathing, dressing, eating or using the bathroom. You should seek a consultation about long-term care options when you become seriously ill or when you turn 60, whichever comes first.

Why you want a professional: Making long-term care decisions is difficult and rife with pitfalls that you cannot see because you don’t do this every day. You want to make the most conscious decisions you can about your care when you have the cognitive and financial ability to do so. When those abilities go away, someone starts making those decisions for you.

Surround Yourself With Good People

When hiring any of these professionals, do your research and your due diligence. Ask friends and family for referrals. Ask good questions. Do not be afraid to have multiple meetings before you engage in a contract. This is your life and your money. These people should be helping you make good, conscious decisions about both. If not, move on.

As Zorba reminds us, being an adult comes with a lot of responsibility. But it doesn’t have to be all doom and gloom. By assembling a team of experts to help you with the various financial aspects of your life, you can take some of the stress out of being an adult. And, who knows, maybe even laugh along the way.

If you need a referral to any of the above professionals, please reach out.

Lanning Financial Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

Find out what services are really being offered

One of the bigger issues in the financial services world these days is whether someone who handles money for another or gives or sells advice to another or sells someone a financial product should be held to a fiduciary standard.  There are different licenses to hold, different regulatory bodies, different ways of doing business, and the list goes on.  This is what makes it so hard for the government to provide uniform regulation (not to mention the power of the lobbyists) and hard for consumers to find their way.

In the mortgage business, clients learned to ask, “What is it that you do, how do you do it, and how do you make your money?”  We answer their questions. The same is true in the financial services business.  Clients need to learn to ask, “What is it that you do, how do you do it, and how do you make your money?”

Because a money manager often just manages money.  By that, I mean, this person takes a lump sum of money and keeps an eye on it and makes sure that it’s invested within the confines of the client’s needs and goals.  But that person doesn’t necessary explore what the client’s needs and goals are. That might be a different person.  A money manager often will also not provide a comprehensive look at a client’s overall financial situation and make recommendations outside managing money—for instance, the advice to get one’s estate plan done.

A wealth manager sometimes just calls him or herself that because it’s a fancy way of saying that he or she only takes clients of a certain net worth.  This person might only specialize in managing money, but often has a group of advisors that do tax and legal strategies for the client in concert with the money management services.  Yet, young people who are on their way to being wealthy may require very similar services.

By the way, everyone it seems calls him or herself a financial planner—whether they are securities licensed with no CFP® designation or are simply licensed to sell insurance.  It’s a widely abused term, just as “mortgage broker” was a few years ago until the regulatory agencies said a licensee could not use that term unless he or she actually had a broker’s license.  The same will happen with the term financial planner.  Someday.

In the meantime, get into the habit:  What is it that you do?  How do you do it?  How do you make your money?

The irony of the timing

Look, I’m not saying this is all bad, ridiculous, time-wasting, and frivolous.  There are some states that weren’t licensing mortgage professionals at all.  Buying a home and getting a mortgage are usually the two biggest financial transactions that anyone will make in a lifetime.  The people who are involved in those transactions ought to have some sort of licensing and compliance control.  If we choose as a society to regulate my hairdresser, then we probably ought to regulate people who care for people’s financial health.

Be aware:  Securities and Exchange Commission did this, too, many many years ago.  Decades later, the SEC failed for years to stop the biggest Ponzi scheme known to this country and its licensee.  I’m not sure when ethics became defined as knowing which regulatory agency would fine you or put you in jail if you ripped off your client, but that’s what I studied.  I’m not sure why it’s important for me to know that the Truth-in-Lending-Act is also known as Regulation Z or that the Real Estate Settlement and Procedures Act is also known as Regulation X.  I do know that the exams that the SEC requires are not dissimilar in the rote memorization that is required to pass the exams that allow financial professionals to manage money.  While the intentions may be good here, I’m not convinced it will have the effect it intends to have.  Bad people find ways to do bad things and seemingly do it best when someone is supposedly watching.

So, feel safer, I guess.  The bar to entry to this profession has been raised for sure.  You’ll be pleased to know that’s true even for me.  I have had to register with a national registration system, I’ve had to take a national test, I’ve had to take a state test, I’ve had my fingerprints taken (again), I’ve allowed someone to pull my credit report, and I will disclose my net worth.  Nevermind that I’ve passed the Bar Exam, the Certified Financial Planner exam, two industry certifications exams, a state exam to get my salesperson’s and then my broker’s license, and maintained my state required 45 units of continuing education credit to maintain my licensing.  I supposed DNA testing and electroshock therapy are next.

The silver lining (because I will always find one):  It’s been good for the economy.  I’ve spent over $1100 getting this done, which I hadn’t planned on spending this year.  The facilitator at the testing site said that he had been closed three days a week for the last six weeks and things were picking up again.  He was pleased to see all us mortgage people showing up to get tested.  So it goes.

Okay, I’m done. Rant over.