Taking a holistic view of your financial plan

As seen in the Racine Journal Times | October 3, 2017

The financial planning industry as a whole is filled with jargon that I feel is intentionally designed to confuse consumers. For example, it takes a pretty high level of awareness to identify the difference between fee-only and fee-based adviser compensation models. Some know the difference, most do not and often lump the two into meaning “essentially” the same thing. They actually represent distinct methods for how you pay for advice, what incentivizes your adviser and, arguably, how your financial plan is created.

Another term that may not always be clear is the distinction between financial life planning and other forms of financial advice.

According to George Kinder, known in the industry as the father of financial life planning, “the life holistic planningplanning philosophy is founded on the idea that every human being strives to live a life of meaning and purpose.” It becomes the role of the adviser to assist a client in the process of discovery and rediscovery of goals and aspirations that matter most, even those that may have been shelved, forgotten or dismissed at some point for being “selfish” or otherwise unworthy.

Kinder says, “If a clear-eyed adviser can help us dispel some of our money anxieties and truly connect to our deeper dreams and aspirations, it can free us from the knee-jerk pursuit of more money and possessions that will otherwise waste the most precious years of our lives.”

In this way, your goals, your family, your milestones and transitions, career choices, end of life wishes, and legacy all influence and, in fact, guide the plan for your money. Naturally, the process of creating a holistic financial plan of this nature requires a high level of trust and relationship between the client and the planner. Admittedly, it also requires a client to be more vulnerable and willing to explore the less quantitative aspects of a more traditional financial plan.

I believe a financial life plan enables a person to be more intentional around money and decisions that impact their financial well-being. It also respects the inevitable transitions that occur over a life. Your goals and aspirations as a young adult will differ significantly from those when you approach retirement and those will differ from how you envision your legacy after your death. Life planning is holistic and long-term whereas other quantitative focused financial advice often deals primarily with the assets you have available to invest at any given moment.

Taking a holistic view of your money and how it can be used to enable your goals and dreams helps ensure that it is working toward you having the great life you define for yourself and your family.

When seeking an adviser, you may want to give thought to how important having your life-long goals and aspirations factored into your plan really is to you.

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