This is the time of year people often start thinking about getting their financial house in order. So if creating a personal financial plan is on your list as a personal and financial goal to accomplish in 2012, you won’t be alone.  As you survey the landscape of fee-only financial planning options available, keep this in mind;

Creating and implementing a comprehensive financial plan that

• optimizes your cash flow and investments;
• aligns your money with your values;
• provides you a smart and strategic financial roadmap that’s easy to understand and implement;

has the potential to be one of the best investment decisions you’ll make in your life.

And I'm not the only one who considers financial planning to be an 'investment' decision. A few weeks ago, I met with a couple that I’ll call Lory and Ben, who were in need of fee-only financial planning. Both of them were long time do-it-yourselfers and had previously worked with an insurance sales person that called himself a ‘financial consultant’.

It turned out that every financial challenge they presented to this financial consultant/sales person had a one-size fits all solution - that being an overpriced, high commission crappy annuity to purchase. No surprise there. Many commission payouts to sales reps that masquerade as financial planners are in the 10% range.

Yes, ten percent - you read that right. If you purchase a $100K annuity, in many cases the commission that gets paid to the sales person is 10% of face value or $10,000. That commission is protected by what’s called an “early surrender charge”. But don’t get me started on annuities, commissions and conflicts of interest- back to the couple...

Although this couple had a bad experience the first time out the gate when seeking financial guidance, fortunately they were referred to me by their good friend and my dear client. That said, they’re both very intelligent, Lory has a PhD, Ben an MBA, and both have a natural skepticism about working with a financial planner.

As a couple, they have also lived quite a frugal lifestyle. So the thought of paying a financial planner to help them develop a customized comprehensive financial plan seemed extravagant. Their motivation though was driven by a large inheritance received about a year ago that was still sitting in a money market account earning around 1% interest.

Lory & Ben easily and readily admitted investing was a topic they found little interest in. They both confessed they felt guilty about not pursuing more knowledge around the world of investing so they could invest the inherited money themselves, but they found stocks and bonds dry and boring. (Truth be told, I'd bet most of my clients, if pressed on the topic, would admit the same thing. And that’s fine with me, because as crazy as it sounds, I love this stuff.)

Towards the end of our consultation, I found Lory ready and excited but Ben was not yet on board. So to my surprise, she suggests to him that the fee for developing a financial plan ought to be viewed as an investment and not an expense. I couldn’t have said it better myself and the remainder of the meeting, we reviewed all the many ways a financial plan could offer a return on investment (ROI).

Whether it’s optimizing your monthly cash flow, designing a long-term investment strategy that increases performance, tuning up your risk management strategy, playing the tax game more efficiently or simply having a strategic, step by step financial plan that details how you’re going to reach retirement - one or all of these elements combined has the potential to enrich your life, increase your net-worth and perhaps most importantly of all, offer you the peace of mind and financial integrity that comes with knowing your financial house is in order.

Why not make 2012 the year you decide to invest in your financial future? Personally, I absolutely love this time of year. Treating yourself to some much needed personal time for reflection and planning ahead is good for the mind, body and soul.

Wishing you all a very Happy, Healthy and Prosperous New Year!

Image credit Stockerre