We often hear the terms financial planner and financial planning, but we are not always aware of the benefits they could add at important or decisive moments in our lives.

Whether at the birth of a child or grandchild, when children leave the nest to go to college, the purchase or sale of a business, or that long-awaited retirement, a financial planner can help achieve financial security for you and your loved ones.

We met with Yolanda Varela, Esq., Certified Public Accountant, Certified Private Wealth Advisor and Sales Manager at Popular One, who explained the most important things you should know about a financial plan and in which situations the advice of a financial planner could be most helpful to you.

What is a financial plan?

A financial plan1 is a roadmap for achieving your long-term financial goal. It allows you to identify what you owe and how much money you have available in savings and investments. This information is vital for setting attainable objectives in important topics such as:

  • Investments2
  • Your children’s education
  • Retirement planning
  • Risk management
  • Tax planning
  • Estate planning
  • Business succession

“A financial planner will give you advice about the strategies you need to strengthen your finances. Is the professional who’s by your side, who knows your situation, and integrates information from a range of professionals in order to guide you toward your objectives,” Varela says.

Examples of ways a Financial Planner can help you:

1. Identifying debts and areas of opportunity. Your financial planner will evaluate the composition of your assets and obligations, analyze your cash flow and how you manage your debt, to help you establish a budget.

They determine, for example, whether you can obtain a more cost effective insurance premium, or whether you have the option to refinance your home at a lower interest rate. After conducting a review, the financial planner may recommend consolidating your debts, such as your mortgage, credit cards, and student loans, for a lower overall monthly payment.

2. Contemplate diversifying your assets. A financial planner will explain why and how you can diversify your assets by purchasing IRAs, annuities, or other products. They, in collaboration with your financial consultant, will help you identify the tax impact of your investments portfolio and develop a strategy that fits your needs and investor profile.

3. Project how realistic your retirement plan is. “Based on the client’s current savings, we can project whether he/she will be able to retire when planned. As part of that exercise, we may be able to determine whether the client should save more or reduce the cost of living. For many, it’s hard to visualize that at retirement time, $500,000 or even $1 million won’t be enough, given the client’s current standard of living and the impact of inflation,” explains Varela. That’s why a financial planner evaluates the strategies available to help you achieve a safe and stable retirement.

4. Review estate planning issues. A financial planner can design strategies to make sure that your loved ones are protected. They review your current estate plan documents: wills, trusts, and powers of attorneys as per applicable laws. Varela noted that these reviews have allowed clients to detect errors in their wills. The financial planner will also advice you on the tax impact of these decisions and how they may eventually affect your heirs.

5. Verify who your retirement plan beneficiaries are. Many married individuals think that if there is a prenuptial agreement their spouse will not be a retirement plan beneficiary. The truth is, your spouse will always be the designated beneficiary unless its modified. This is a matter to consider if, for example, spouses have children from previous relationships.

A financial planner can also advise you about other topics that may impact the inheritance in non-traditional families, always within the framework of applicable laws.

6. Provide advice on business succession plans. Varela mentioned examples of clients who have businesses that have planned for succession in the case of an owner passing, but have never thought about what would happen if they were to get divorce, became disable, or retire. A financial planner could help define exit strategies that best fits with the financial reality of the business owner’s family.

7. Forecast education costs for your dependents. A financial planner can evaluate financing alternatives, design investment strategies, and explore payment options so that your children or dependents will be provided for during this important stage in their lives. Using retirement savings may not be the best option to cover education costs.

8. Design strategies for risk management. He or she can identify risks that might cause a financial impact, quantify the need for insurance policies3, and review your current policies. A planner can also design financial and asset-protection strategies using insurance products.

The sooner you know where you want to go, the more opportunities for a thorough analysis of your finances.

A financial planner will help you design a personalized plan for scenarios like those we outlined above, and for other situations as well. Contact your Private Banker or financial advisor and together, create a strategy to help you accumulate and preserve your capital.


1 The financial plan has a cost and may vary depending on the plan. The suggestions and recommendations included in the client’s financial plan are offered as a guide, with no guarantee of to the yields or performance of any insurance or investment product that may have been acquired pursuant to such recommendations. Banco Popular de Puerto Rico and/or its subsidiaries and affiliates are not engaged in rendering legal, accounting or tax services/advice. If legal, accounting, or tax assistance is required, the services of a competent professional should be sought. Certain conditions may apply.
2 Investment products are not insured by the FDIC, are not deposits or obligations, are not guaranteed by Banco Popular de Puerto Rico or its subsidiaries and/or affiliates. Investment products involve risks, including the possible loss of the invested principle.
3 Insurance products are not FDIC insured, or other government agencies, are not deposits or obligations and are not guaranteed by Banco Popular de Puerto Rico or its subsidiaries or affiliates and may lose value. Banco.