“I’ve received a large lump settlement from my divorce. How should I invest the money?”
This money should be invested in a manner that is particular to your financial circumstances and reflects your financial and life goals. This requires a comprehensive two-phase process to be completed before the question can be properly answered. It cannot be answered in isolation.
A qualified financial planner can assist in the first phase by developing financial-planning documents that act as a road map to take you from your current situation to where you want to be in the future.
In the second phase, an Investment Advisor can develop a personalized investment plan that supports and integrates with your financial plan.
Insist on being part of the planning processes to improve your understanding of both of the plans, how they were developed, and how the individual pieces fit together to meet your objectives. You also need to understand and be comfortable with the level of risk.
Selecting an advisor with financial-planning and investment-management skills can be time-efficient and cost-effective. Revenues derived from investment management can often be used to underwrite some or all the financial-planning service fees. This situation also provides the opportunity of this individual continuing as a trusted and valuable resource in the future.
Douglas D. Lamb, CA, CFP, MBA has been providing trusted financial advice for over 30 years and is president of Spera Financial Inc., an independent firm providing financial and investment solutions to individuals undergoing separation and divorce.