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Resources: Working with a Financial Professional

Financial professionals are typically viewed as people who can help identify ways for your family to save for college or retirement. But they can be so much more. By discussing everything from savings plans and risk tolerance to long-term tax and estate planning, your investment professional becomes a trusted personal guide. This relationship should be cultivated over time.

The first step in working with a financial professional is identifying your financial goals. Next, you'll develop an investment strategy. This plan reflects many aspects of your life. It includes an investment portfolio that measures your risk tolerance and return expectations. Together, you should reassess your financial needs on a regular basis. Then adjust your portfolio based on market conditions - and your life.

In short, financial professionals will customize an investment strategy that fits your needs. Some plans are very specialized. Others are complete financial solutions. A financial professional may even recommend the services of other professionals such as accountants or attorneys.

Another common perception is that you must be rich to use a financial professional. However, most people will benefit from the advice of a financial planner, no matter what their income.

To achieve your investment goals, your financial professional has an entire suite of solutions on hand:

  • Investment planning: It's  never too soon to meet with a financial professional. He or she can help you develop financial life goals, review them periodically, and select or allocate your investments.
  • Education savings: With education costs skyrocketing, we believe it's more important than ever to create a college savings plan. Tuition, books and housing can cost tens of thousands of dollars annually. Luckily, there are several investment plans available to make saving for college easier. For many people the most popular choice is the 529 plan, which can offer several tax incentives for parents or family friends. There are other plans available, including the Coverdell Education Savings Account, Roth IRA, and more.
  • Tax strategies: Investors have abundant choices when seeking tax advantages. 401(k) plans for retirement, 529 plans for education, and tax-free municipal bond funds are well-known vehicles. But there are several other investments that offer significant tax advantages as well, such as reinvesting mutual fund dividends or rolling over an IRA. A financial professional can help you devise a strategy to help lower your tax burden.
  • Retirement planning: Learning the retirement alphabet is a challenge for many adults. IRA, GSRA, RRSP, SERP... these are just some of the investment options available for retirees. Saving early and devising a retirement strategy are important as you approach your golden years. Even then, more planning is essential as your assets are distributed to you from the various retirement plans to make sure your nest egg can last.
  • Estate planning: Perhaps the most overlooked area of your financial future is estate planning. The tax liabilities for heirs can be severe and they may be more burdensome without seeking the advice of a financial professional. Understanding the various laws that affect your estate is essential when drawing up a will.

The best reason for working with a financial professional is the relationship gained. Successful investors avoid making decisions based on emotion. A financial professional helps you make intensely personal decisions with a composed and objective eye.




To obtain a prospectus, download online or call Sales Support at 1.800.787.1621

While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that The Principal® is not rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements. For more information about our funds, including their full names, please see the Principal Funds, Inc. prospectus or call Sales Support at 1.800.787.1621.

Investing involves risk, including possible loss of principal.

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