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Introducing the Summarized Financial Plan Thumbnail

Introducing the Summarized Financial Plan

A financial plan is a document containing a person's current financial situation and long-term financial goals, as well as strategies to achieve those goals. Typically, it involves putting together a combination of cash flow planning, education planning, insurance analysis, debt analysis, retirement planning, and stock option planning. It also involves aligning one's assets (home, rental properties, private stock, retirement & brokerage accounts) to ensure that they are meeting one's long term financial goals. A good financial plan is a road map to help one achieve their desired financial outcomes.

A plan like this often requires a series of assumptions - monthly savings rate, year over year income growth rate, asset rate of return, etc. The issue with this is that often circumstances in our lives force those assumptions to change, thus dictating a change to the existing financial plan. One can have an unexpected job loss or a promotion, one's child can choose to go to a private school instead of a public one, or a natural disaster can significantly destroy a home, forcing a depletion of liquid assets to repair the damage. Because we saw these types of occurrences happen with our clients, we decided to re-think how we approach building out financial plans.

In our opinion, the best financial plan is a simple & flexible one. Instead of outlining a static way, our new "Summarized Financial Plans" are done in collaboration with our clients to ensure that they are continually working towards their goals. Any short-term deviations away from a plan are accounted for semi-annually. As part of building out the plan, there are three fundamental questions that we want our plan-holder to be able to answer:

  1. Where are we now?
  2. Where do we want to be?
  3. How do we get there?

By shifting the focus to these sets of questions and away from lengthy projections, we can create a roadmap to help guide the plan holder. In our Summarized Financial Plan, we provide a breakdown of the client's current financial situation, a snapshot of the client's assets (where they are located & how they are allocated), the discrepancy (if any) between their risk score and their portfolio's risk score, and action items to take to help meet their goals and priorities. You can see an example here.

We will still provide projections and be able to perform any necessary analysis - however, that will no longer be the focal point of the financial plan.

However, the real value that we provide lies not in the plan building, but in the accountability to the plan. No matter how well-thought-out and designed a plan is, if the plan-holder does not stick to it, the plan is moot. Our job, as financial advisors, is to provide methods of accountability and work alongside our clients to help them achieve their financial goals. 

If you are interested in learning more about or process, please email us.