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WHAT IS “ COMPREHENSIVE FINANCIAL PLANNING ”?
You may have heard the term “ comprehensive financial planning ” as an offering of financial advisors . But what does true comprehensive planning involve , and have you gotten it ? Financial advisors wear many different hats . We are often asked questions by clients when they do not know who else to ask . These questions are often well beyond the scope of our daily practices , but it is incumbent upon us to either answer the questions or refer the client to someone who can .
The same holds true when we create financial plans for clients . There are certain areas we discuss for which we will need to bring in other professionals to help . Oftentimes , we consult with estate planning attorneys , CPAs , mortgage bankers / brokers , property & casualty agents , and others to make sure our clients are receiving a truly comprehensive plan . So , what are those areas of planning that create a comprehensive plan ?
1 . Investments – Reviewing a client ’ s current investments and recommendations based on the results of the financial plan . This includes review of current 401k and retirement plans , IRAs , taxable investment accounts , company stock plans , bank accounts , savings bonds , and any other investments .
2 . Retirement / Retirement Income Planning – Determining when to retire , how much to live on , and what investment accounts to use for it . Also , another important aspect is determining the best time to take Social Security and pensions .
3 . Education Planning – Determining how much and where to save for children or grandchildren for education . There are several ways to save for education , but some can hurt the potential for financial aid . Section 529 plans are a great way for many people to save for education .
4 . Goal-Oriented Planning – Planning for goals such as purchasing a new or second house , boat , or camper , or traveling extensively at some point in the future . Planning to save for those goals is important , especially if they are extremely costly .
5 . Risk Management – Reviewing existing insurance policies and implementing life , disability , and long-term care if necessary . Also , reviewing current property & casualty insurance and ensuring that an umbrella insurance policy is in place is essential .
6 . Estate Planning – Discussing exact wishes for people ’ s estates and having attorneys review and / or implement wills , powers of attorney , and living wills / medical directives is important to protecting assets for future generations .
7 . Tax Planning – Reviewing people ’ s tax returns and potentially consulting with CPAs if necessary to make sure people are maximizing their tax savings and filling out their forms properly .
8 . Budgeting / Cash Flow Analysis – Setting up budgets and / or reviewing current expenses to see where savings can be achieved . Examining mortgage interest rates and payments as well as other debt levels , interest rates , and payments is another part of the process of making sure people are minimizing interest and maximizing payments toward principal .
9 . Emergency Reserves / Cash Management – Reviewing of cash / savings to determine whether people have enough saved for emergency reserves in case something big would happen that would require a large outlay to fund .
10 . Charitable Giving – Consulting on charitable giving and meeting with either local foundations or national providers to decide how to best handle giving .
Plans can be very different from one individual / family to another depending on financial situations . Not everyone needs all 10 of these sections – in fact , most people don ’ t . If you do not feel you have a good roadmap in these areas , you should definitely look for a new advisor who can provide one . We are happy to help !
David Hoffmann has 24 + years of experience as a Financial Advisor and is the CEO of Justabout Wealth Management . As a CFP ® designee , he counsels clients on financial planning and investments . He also serves companies by providing retirement plans .
For further information , contact David at : Justabout Wealth Management , 375 Southpointe Blvd . Suite 360 , Canonsburg , PA 15317 Office : 724.754.1440 justaboutwealth . com
Legal Disclosures : Securities offered through Triad Advisors Member FINRA / SIPC . Advisory Services offered through Triad Hybrid Solutions LLC , a registered investment advisor . Justabout Wealth Management LLC and Triad Advisors , LLC are not affiliated .
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