Holistic planning is defined by ISC Financial Advisors as - Evaluating all your moving parts, creating a unique strategy specific to your situation, goals, then working with your professional team to design and implement your plan with a keen eye always on taxes.
Think of this as the 'quarterback' calling a play in the huddle so that the entire offense is on the same page and will execute the play as designed.
Over the course of my twenty plus year career in the financial services arena, two things are abundantly clear.
- 'Financial or Holistic Planning' is an elusive phrase and most people don't know what it means, including some in the financial services profession!
- Most people are looking for 'holistic planning' but don't know how to ask or shop for it. They simply want to know that they will be okay for retirement and are ‘on-track.'
Don't worry if you don't know the answers to either of those questions or what holistic planning means.
First, personal finance or financial planning is not taught to us in school. The typical financial educational process for most people starts the moment we arrive on campus at college. The first day you walk on campus you are met with the friendly folks from VISA, offering a free pizza or cheap tee-shirt if you sign up for their credit card. And, in a matter of a few months, you have racked up a $1,000 bill on late night pizza’s, subways and ‘emergency’ shopping trips with your friends. Nice, thanks VISA for the help!
After you navigate your first financially painful hurdle of VISA, you finally graduate and land your first job. You are then handed an ‘employee benefits’ manual and are told to make your elections for healthcare, retirement plans, optional insurance coverages, etc. with your new employer. These things are complicated. How are you supposed to know what you need to do?
Oh yeah, and now it is time to start paying down your student loan…Should you consolidate this? Should you pay this off quickly or over ten or more years? What is tax deductible or not?
And, don’t forget the new car you need to buy because you are ‘flush’ with cash; you have over $20 in your bank account!
Then you get married, buy a house, furnish it with items you don’t need and really can’t afford – Hello VISA again, and then kids pop up.
So many questions and important decisions are being made in your early twenties, and many people don’t understand what to do or the significant impact these choices may have for the next several decades.
If this sounds anything like your experience, don’t fret. This is what the vast majority of people have gone through. It is not too late to make the changes necessary to get back
For most people, no one has sat down to explain the need for an estate plan, what the proper coverages are for property and casualty, or why it is best to work with one insurance carrier or financial advisor versus another. How do investments really work? What are employee benefits and how to choose between them, and how to put it all together while maintaining the proper tax strategy?
When new clients come to visit I see two distinct camps.
Camp 1 - I see a very disjointed approach to planning. It looks like a patchwork quilt of strategies that independently may be good but together conflict. Typically, a new client may have engaged someone to write an Estate Plan, but it is not funded or implemented properly. They may have a CPA, use one person for Property and Casualty Insurance and another person for Life, Disability and Long-term Care, and then use an entirely different person for investment management...
And, NONE of the financial professionals are talking to each other to make sure the strategies are
Camp 2 – No real plan! Clients have signed up for employee benefits because they had to make an election. They signed up for the retirement plan at work but don’t know how much they are saving or what their investment options are. They may have a little life insurance their buddy sold them right after college but don’t understand what it is. They typically don’t have an estate plan or haven’t updated one and most likely have the incorrect coverages for property and casualty and don’t even know it.
Working with a holistic financial planner will help shed light on the dark and neglected areas of your financial picture. Over the course of the next several months, I will dive into the eleven specific areas we believe incorporate holistic planning for our clients. Each area has several moving parts to think about as it pertains to your goals and objectives and life circumstance. Unfortunately, there is not a ‘one size fits all’ strategy. Each person, couple or family is different and requires a unique plan.
Below is a list of topics we will review.
Part 2 The Joys of Estate Planning
Part 3 The excitement of cash flow and debt management planning!
Part 4 Property and Casualty – Need coverage, but the topic will alone
Part 5 Life Insurance – Typically oversold and misunderstood.
Part 6 Disability Insurance – Primarily overlooked and needed in most cases.
Part 7 Long-Term Care – How it works and your options
Part 8 Retirement Planning and Social Security – Time to Dream!
Part 9 Investment management - Making your money work for you. (Bucket strategy – include Annuities and work retirement plan)
Part 10 Educational planning – Putting your kids through school.
Part 11 Employee Benefits – Leveraging great benefit options and leaving the ‘junk’ out.
Part 12 Legacy Planning – Leaving your mark on the world.
Finally, please remember that when building a holistic plan the individual parts of the plan are always moving. While holistic financial planners dream about a fluid plan we can execute on with precision, that is simply not the case. ‘Life’ happens and thus necessitates the need for a flexible plan. Building a plan that is grounded in the client's goals and objectives, but has enough wiggle room to change as life does, is extremely important. And, the plan must always pay attention to taxation at all points of the planning process.
Thanks for taking a look!
Tim Jaynes, AIF®
This article represents opinions of the authors and not those of their firm and are subject to change from time to time, and do not constitute a recommendation to purchase and sale any security nor to engage in any particular investment or legal strategy. The information contained here has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy. Tim Jaynes, AIF® is not an attorney or accountant and does not provide legal, tax or accounting advice. Please consult your legal or tax professional to discuss your individual circumstances.