Investment advice and financial planning are two distinct financial disciplines. Financial planning gives us a better understanding of our clients’ situations and aids us in the management of their portfolios. Planning is the process of evaluating a client’s current financial condition. We need to know a client’s net worth, the assets that create that net worth, current income, savings and expense history, retirement plan participation, retirement goals, education funding needs, insurance coverage, and wealth transfer desires so we can create a comprehensive plan.
Planning is more than stating a general goal like, “I want enough money at retirement.” Planning is the process of combining a number of financial variables into a written document that details how you will arrive at your goal. It becomes the road map you follow to your financial destination.