The term financial planning gets thrown around casually. The terms financial advisor are often used interchangeably. Some financial planners deliver what I would call an assessment that does not have to be in your best interest a suitability assessment, rather than a best interest assessment. These assessments are applicable to a suitable product sale. Often financial planning is synonymous with or included with investments. Again, the financial planning maybe incidental to the investments but fails to standalone.
What financial planning can deliver for you
The following categories show many of the financial issues that can be addressed through a financial planning relationship with a CERTIFIED FINANCIAL PLANNER™, Chartered Retirement Planning Counselor and Accredited Investment Fiduciary®.
Cash Flow/Budgeting
- Creation of personal or business budget
- Provide guidance and analysis on cash flow management, budgeting, and emergency fund planning
- Explain various components of cash flow (income, taxes, expenses)
- Savings strategies
- Debt management strategies
- Personal financing strategies
- Analysis of personal statement of financial position and statement of cash flows
Personal Financial Planning
- Creating statement of personal financial position (net worth) and cash flow statement
- Determining clients’ financial status by analyzing special needs, investments, taxation, employee benefits etc.
- Major purchase goal analysis and funding options
- Advice in change of lifestyle or major life event (Marriage, divorce, children, job, education)
- Provide financial guidance/planning for special circumstances including death, disability, job loss, monetary windfall, divorce, etc.
- Discussion of various mortgage options/real estate purchases
- Importance of saving (dollar cost average, compound interest)
- Net present value calculations including time value analysis, future value, present value, present value of an annuity due
- Education on mortgage options and financing analysis
- Stock option planning
- Risk management and insurace planning
- Medical health planning and planning
- Disability planning
- Pre-retirement death (economic value replacement) insurance
- Long-term care-timing/premium coverage
- Umbrella liability
Tax Planning
- Tax reduction strategies
- Tax avoidance strategies
- Tax deferral strategies
- Tax managed investing
- General discussion of deductions and income recognition
- Answer questions about investment tax issues
- Discuss statement of personal financial position
- Analyze personal cash flow statement
- Analyze and explain Income taxation of life insurance and annuity products
Retirement Planning- Pre-Retirement
- Social Security and Medicare health care cost planning
- Retirement needs analysis
- Savings planning to help clients meet their goal
- 401(K), cash balance, etc. contribution limits planning
- Retirement plans analysis and education
- Beneficiary designation planning
- Employer plans vs. self-directed plans analysis
- Act as a liaison coordinating of retirement plan service providers, product sponsors, or vendors
- Education on withdrawal strategies and sequence of returns risk
- Pension analysis benefits of lump-sum vs. annuitization
- Roth conversion analysis
Retirement Planning- Post-Retirement
- Required minimum distribution or 72t calculations and analysis
- Sustainable spending rate analysis
- Needs, wants and wishes income planning strategies and implementation
- Beneficiary designation planning
Education and College Planning
- College costs and inflation analysis
- College cost reduction strategies
- Development of funding strategies
- Provide direction on ownership of assets
- Discussion of qualified tuition/college saving plans
- Financial aid strategies
Investment Planning/Asset Allocation
- Risk and reward (risk tolerance analysis)
- Risk tolerance/risk capacity/need tolerance assessment
- Risk and reward education
- Asset allocation analysis
- Socially responsible investing investment integration
- Diversification analysis
- Analysis and research on individual securities
- Investment policy statement development
- Tax managed investing
Estate Planning
- General estate planning and gifting strategies
- General estate tax planning and education of trusts and estates General trust planning and education – types, features and taxation
- Explanation of estate planning structures/documents – wills, powers of attorney, Trusts, etc.
- Sources of estate liquidity planning
- Ownership titles and titling of assets planning
- Discussing impact of account and trust beneficiary designations
Business Financial Planning
- Cash flow analysis
- Retirement planning
- Succession planning
- Employee benefits planning
- Business use of insurance analysis
Expect more out of a financial planning relationship
Financial planning as delivered by Board Certified, CERTIFIED FINANCIAL PLANNER™ professionals is relatively uncommon. Moreover, CFP® professionals that offer standalone financial planning is even more uncommon. We believe that a professional should be able to deliver a return on investment on their financial planning advice. Envision Wealth Planning focuses on helping you turn income into wealth. As you have read, that is more than just telling you to save more.
Let’s get a conversation started by telling us what’s on your mind.
