The Eight Most Important People in Your Financial Life

As one of the world’s wealthiest people and most influential voices in investing and finance, Warren Buffett acknowledges he wouldn’t have reached those heights without guidance from three individuals in particular: his father Howard Buffett, his late first wife Susan Buffett and his mentor Benjamin Graham.

While the advice and guidance of others may never make you a billionaire like Buffett, it can benefit you in profound ways, says FPA member Bruce Colin, a CERTIFIED FINANCIAL PLANNER™ professional with Bruce Colin & Co. Wealth Management in Rancho Palos Verdes, Calif. “Everyone needs a somebody or two in their life who understands the idea of stewardship of financial resources, who sees things differently, who they can bounce ideas off, and who they can turn to for answers or guidance on matters related to money and finance.”

They could be people from your personal life who offer informal guidance or professionals you pay for advice. Here’s a look at eight likely candidates to play that role:

1. Parent(s)/guardian(s)/relative(s)

“There is no one that has a bigger impact on your financial life and financial mindset than the people that raised you,” says FPA member Matthew Gaffey, CFP® and senior wealth manager with Corbett Road Wealth Management in McLean, Va. “Your attitude around money — its worth, the importance of saving versus spending, etc. — is very much a learned behavior and why many people have such a hard time changing their spending habits. Your parents provide you with a model, intentionally or unintentionally, of what is ‘normal’ and ‘acceptable’ behavior when managing (or spending) their own money. It's not much different from the other examples parents set for their children.”

Getting financial guidance from parents/guardians is especially important for younger people as they seek to find their financial footing in life, says Colin. A parent, guardian or relative can help open a bank account, choose a first credit card, offer suggestions about managing debt and more.

2. Your spouse/partner

You and your spouse or partner should be on the same page with regard to goals, managing household finances, investing strategy and the like. If one spouse or partner takes on the lion’s share of household financial management responsibilities, it’s important that the other “at least has a working knowledge” of their financial situation, so they can offer educated input and take the reins financially if necessary (such as due to divorce or death), says FPA member Jon L. Ten Haagen, CFP®, who heads Ten Haagen Financial Partners in Huntington, NY.

3. A financial professional

Just as a person needs a primary care physician to serve as the focal point for their healthcare, they need a point person to support their financial health and provide a general plan to connect their goals with their resources. “Make sure you have a true financial adviser such as a CFP® who really has your best interests in mind,” suggests Ten Haagen. In working with a CFP® professional, you’re getting a true fiduciary, an adviser who is obligated under the terms of their professional license or designation to always put the interests of their clients first, above their own interests and those of their firm or the company (or companies) whose products and services they represent. To find a CFP® professional in your area, check out the Financial Planning Association’s searchable national database at www.PlannerSearch.org.

“Financial planning encompasses more than investing,” explains FPA member Lauren S. Klein, CFP®, of Klein Financial Advisers in Newport Beach, Calif. “A good financial adviser will get to know you at a level of detail many people reserve for their therapists! This level of intimacy is what’s needed to help you make short- and long-term financial decisions based on your real needs, goals, and emotions. From investing wisely, to planning for retirement, to tackling all of the nuts and bolts of your complex financial life, your financial adviser is your Sherpa through it all. 

4. Financial/insurance specialist(s)

Depending on your needs, the complexity of your circumstances and your stage in life, you could benefit from other, more specialized professional advice from:

• An accountant and/or tax specialist to manage your tax situation. “Tax strategies can play a significant role in preserving your assets at every stage of life,” says Klein.
  
  
• An insurance agent to help guide you in decisions about various types of insurance, including life, disability and more. “Appropriate insurance plays a key role in protecting your assets and your family,” says Klein. “A good insurance agent will help identify appropriate life and health insurance to be sure you — and those who depend on you — are protected. 
  
  
• An estate planning attorney to create your will, powers of attorney and other important documents specifying how your assets and key decisions will be handled in the event you can’t handle them yourself.

5. Your executor, successor or co-trustee

In the context of estate planning, Klein explains, “an executor or trustee is responsible for making sure all assets are accounted for and transferred to the right party, pay debts and taxes — your own, your spouse’s, or both. An executor is legally obligated to follow your instructions and to act in the best interest of all beneficiaries. This is a huge responsibility. Choose wisely, and review your choice every five years or so to be sure the person is still the best player for your team.”

6. Someone from your network

A financial role model or mentor, someone who has shown stewardship with their own finances, can help you develop and maintain healthy financial habits. That person could be a friend, neighbor, professional contact, work colleague, etc.

7. Employer

They may not ever provide you with financial guidance, but as the primary source of your income, and potentially, workplace benefits such as health insurance, the entity that employs you is of course a key “person” in your financial life. An employer becomes a positive force in your financial life when they provide perks such as matching retirement plan contributions, shares of stock or an ownership stake in the company, etc. Some employers even offer access to a professional adviser for guidance on selecting retirement plan investments, workplace benefits and the like.

8. You!

Earning an income, spending and saving habits, goal-setting and goal-attainment, investing decisions — when it comes to most of the key factors that determine your financial standing, the buck ultimately stops with you. All the advice and guidance you receive from professionals and other people in your life will amount to little without thought, commitment and follow-through by you.