THE IMPORTANCE OF FINANCIAL PLANNING
When people think of financial planning, they think “investments”. Nothing can be further from the truth.
Investments is just 1 piece of the pie when it comes to the process. The practice also incorporates other areas such as insurance, taxes, and estate planning. In addition, a planner looks at one’s current financial picture and finds ways to meet one’s goals and/or needs.
People have lost sight as to all of the different components taken into account when evaluating one’s current and future situation. Financial planning is extremely valuable because it (1) answers people’s questions, (2) helps people realize their present condition, (3) makes people think realistically about their future, (4) tells them which goals/needs they can attain, and (5) points out changes to be made now.
Everyone knows that relationships are paramount to building your client base as well as keeping your client base. Financial planning helps you build stronger bonds with your clients because you’re taking an interest in them by finding out their personal circumstances and then helping them. It shows a genuine concern and care about who they are as people. They see you as taking an active role and interest in their life: their dreams, their problems, their worries, etc.
MY ROLE
My firm helps advisors add extra value to their client relationships. Once I gather information from you about your client (their goals, financial data, etc.), I analyze their current state and future state and provide recommendations. I take into account all of their variables (earnings, spending, savings, assets, asset allocation, inflation, etc.), as well as anticipated changes down the road, and see how they all come together and play out when looking at their future. The decision making process is about understanding how a client’s different variables (and changes to these variables) affects various outcomes. When analyzing this information, other considerations are taken into account such as taxes, penalties, risks, and tradeoffs.
After this analysis is complete, I create a financial plan with various reports. In addition, I create a summary report that pulls out the main points and highlights the insights in the financial plan. The summary report deciphers the financial plan at a high level for you and your client – (think of the financial plan as the data or back up information). Also provided is a page which lists the next steps for your client.
If you’d like, I can mail you a sample financial plan and summary report. Remember that this is a standard sample plan and write up. These reports are not set in stone, so if you prefer additional reports, I’m flexible to your needs.
