Financial Planning

The Need for Financial Planning:  Many financial problems occur in each of our lives. How we face these issues can determine the quality not only of our lives but also those of our loved ones.  Financial challenges most can expect to face include: 

Cash Management:   More than just keeping a balanced checkbook, cash management includes preparing--and following--a budget, using credit wisely, and keeping one's income tax burden to the lowest level possible. Cash management includes the concept of disciplined savings or “paying yourself first.”

Risk Management:   There is a risk of loss of both life and property.  Life insurance can be used to help protect a family against the risk of premature death.  Disability income insurance can help protect against the loss of a person’s ability to earn a living.  Property and casualty insurance can help protect our worldly goods against accident and such perils as fire, flood, earthquake and theft.

Accumulation goals:   We all need to save money.  Educating our children is one very common goal.  Buying a home and building an investment portfolio are two other typical accumulation goals.

Financial Independence:   It is wise to take steps now to work toward achieving financial independence by the time you are ready to retire. Saving and investing to meet this goal is paramount to a secure future.

Estate Planning:   Recognizing that death is inevitable, planning for the ultimate transfer of our assets to our children and other heirs.

Financial Planning in a Complex World requires working cooperatively to Solve Problems:   Solving these problems in today’s world is not easy--but it can be done. Two basic steps are involved. The first step is to recognize that in a complex, ever-changing world, expert help is required.  It is important to assemble what we call the financial planning team, which includes trained professionals such as your attorney, CPA, life insurance agent, securities broker, or financial planner. Often the financial planner assumes the role of team leader in the process.

With the help of your team, you are ready to take the second step: developing a financial plan or a systematic, integrated plan for dealing with each of these financial issues.  It is vital that your advisors are willing to communicate with each other and to work cooperatively together.

The Financial Planning Process:   This process can be summarized in the following steps:

Defining a client's present financial position.  This includes identifying income sources and amounts; expenses; assets and investments; liabilities and debts; liquidity; insurances; group or employer provided benefits; and other special circumstances.

Developing a well defined, client-driven set of goals and objectives to work toward. Examples include: tax minimization; cash flow and debt management; protection; risk management and estate planning; investment and portfolio; return on investment; retirement or financial independence; college education funding; specific capital purchases; and gifts to charity.

The planning process usually occurs over several meetings, depending on the complexity of one’s financial situation. To begin, clients fill out a Confidential Financial Questionnaire and gather supporting documents, such as a tax returns, paycheck stubs, employer provided benefits, investment information and so forth.  The process also includes capital needs calculations in the areas of survivorship, disability, education of children, retirement and estate planning.  All of this material informs the comprehensive written recommendations we develop for each client.  We partner with our clients to review these recommendations and discuss them in detail, answering any questions before we create an implementation schedule for recommendations in the plan. The implementation of planning recommendation generally occurs over time.

Some examples of planning recommendations might include: reviewing and changing employer provided benefits; purchasing additional life or disability income insurance; establishing a systematic investment plan; reallocating or transferring an investment portfolio; implementing tax reduction strategies; Changing an employer-sponsored benefit program; and establishing an IRA, pension plan, or education savings plan.

Once the planning process is complete and recommendations have been implemented, we monitor financial progress and review it periodically in accordance with the desires of the client.