What is financial planning? For starters, let me share the quote from our home page:
“Financial planning is not a software or a binder or even a process. The best financial planning is an ongoing relationship. It’s about organizing and calculating and counseling and leading to help people make smart choices about their money…continually…as they live their dynamic lives in a changing world.”
My mentor and coach Bill Bachrach said this last year. Bill only works with advisors committed to full service planning relationships with clients. Moreover, Bill is not a fan of the transaction based sales culture that permeates much of the financial industry. Therefore, it’s no surprise that I enjoy learning from Bill. On this page I cover “what is financial planning?” and down below, “what is the financial planning process?”
Please note that this is a serious discussion. If you’re not serious about making smart choices with your money, and with whom you choose to work, save yourself the effort and stop reading here. If however, you are serious, what follows is not only a different view of things. But also a refreshing and positive view of financial planning and the financial planning process.
What is Financial Planning?
Financial Planning is the relationship. Do you want a 50 page printout but never look at it again? Because it’s basically old and dated the minute it hits that drawer? Do you want to be sold a high commission product and never hear from the “advisor” again?
What is Financial Planning? Financial Planning is Getting Organized
Financial Planning is that initial period when you get everything organized the way it should be. And then you say “ahhhhh.” It’s combining multiple accounts and closing the unnecessary ones. It’s updating old insurance policies and sealing up gaps in coverage. Moreover, tt’s making sure your legal work matches your tax planning, insurance, and account titling.
What is Financial Planning? Financial Planning is Following the Best Advice
After getting organized we follow the best advice for the situation. Now that the foundation is set, we go over goals and plan accordingly. We decide how much needs to be allocated – to what and where. We maximize plans for tax exposure. Furthermore, we ensure that the estate planning mixes well with the whole package.
What is Financial Planning? Financial Planning is Accountability
You trust your advisor team to help you get organized. then you trust them to give you excellent advice. You expect them to know the rules and laws that affect your planning and expect them to help you navigate those rules. But you also expect your advisory team to keep you accountable to your goals. When you need to be doing something, you want your team to kick you in the pants if necessary. You expect a coach – not a mousy salesperson who’s “afraid” to lose your business.
A coach has principles. And a good coach doesn’t compromise those principles. Even if those principles risk losing a “star” player (or a star client).
What is the Financial Planning Process?
Not only do you want to be organized, not only do you want solid advice and then to be held accountable, but you want a deliberate process to make your plan happen.
The financial planning process is dynamic. Your advisory team works from a service calendar. Your team executes on each of its promised deliverables through a systematic checklist. Comprehensive financial planning consists of numerous checklist points.
How We Do it at Walnut Hill Advisors
We use a deliverables checklist. And this checklist currently holds 107 checklist points. We deliver on those points through 3 meetings with clients throughout the year. As you might imagine, we don’t inundate our clients with all of these points. As many of these points happen behind the scenes. Our 3 meetings typically include:
- Basic financial statements.
- Goal Progress Report.
- Check in on the relationship and level of communication.
Depending on the season, our meetings include a tax forecast or tax preparation session. Furthermore, each of these meetings has a specific deliverables focus. One meeting focuses on values and updating the Financial Roadmap(R). One meeting focuses on risk management. And one meeting focuses on estate planning and goals.
The Financial Planning Process is Ongoing and Dynamic
Good financial planning doesn’t end at the second meeting. Good planning progresses, meeting after meeting. And good planning changes with client goals and life events. Clients may not need a trust. But then they do need one. Or, a client may invest conservatively, but then an inheritance permits them to be more aggressive.
The meetings and relationship that builds over time contribute to a proactive and positive planning process. Moreover, the client feels better after each meeting – reminded that the plan is in place. And this is despite any current “headwinds” or “storms.”
If this sounds like what you want, take the next step to learn how to get started. And learn how to discover if you’d be a good fit to work with a particular advisory team. In this case, our planning team. I have a couple of things that might help you to the next step.
First, See how we develop a potential relationship with people through our introduction process:
Second, and as part of that process request my guide on How to Choose a Financial Advisor
Third, Request a copy of Values Based Financial Planning – Bill Bachrach’s book on getting a good start to the financial planning process based on values.
Thank you for your time in reading this.