Having a Financial Plan Benefits Investors and Their Advisors

Let’s start with the obvious benefits:

Having a properly-executed financial plan is like having a 360 degree view of your entire financial situation, in one document.  To put it another way, it’s like having a total body scan except, instead of it being about your physical health, a financial plan concentrates on your financial condition.

It enables you to give serious thought to both your short and long term goals.  To distinguish between “wants” and “needs” and, then, to budget, save and invest accordingly.  To plan for taxation and consider intergenerational transfers of wealth.

To think realistically about what the future might hold, because investing isn’t a short-term exercise.  It’s a journey, and a long one at that.  So simply being concerned with how much you’ve saved is really not the issue.  What you should be concerned about is, have I saved enough, have I missed anything?”

But there’s something else, as well.

In my thirty plus years as an advisor, I’ve learned an interesting fact about people, in general.  Most of us are uncomfortable talking about money.  Our money, to be specific.  How much we have, how much more we want, even what we hope to be able to do with it.

Think about it.  Whether you’re already wealthy or just starting out, how can an advisor really help a client, really add value, without knowing these vital pieces of information.  And, frankly, how can you really make the right choices and decisions, or truly know whether or not you’re on the right track, without the complete picture a plan provides?

Recently I’ve had a lot of clients who have wanted to go through the exercise.  Who have wanted to sit down with me, and our financial planner.  Because of it, we now have a much more meaningful relationship; and by that, I mean, I now have a much clearer understanding of what they want, now and down the road.

We now have more significant conversations, allowing me to do an even better job of keeping them on track, even in turbulent times.  Especially in turbulent times.

Which brings us to the subject of reviewing your financial plan regularly.  Because merely having one isn’t enough.  As life evolves, so should your plan.

Fact is, you have nothing to lose and everything to gain from a financial plan.  You’re helping your advisor help you more effectively — which ultimately means you’re helping yourself.  And you’re gaining valuable insights about yourself, at the same time.

It’s a win-win situation every way you look at it.  I like to call it having a coalition of common interests.