As financial professionals, we are frequently reminding people that the future is uncertain. In discussions of the investment market, we hear others say that there’s no crystal ball, that they are only making an educated guess, or, as a favorite economist once put it, “To make a good prediction, state what is going to happen, or when it’s going to happen, but never both.” While most investors understand that the lack of predictability in the markets is inherent, we often overlook the fact that our own futures are equally unpredictable. Financial plans, the gold standard of many advisors, require intensive budgeting, predictions of future spending, and understanding how you will feel about risk and safety in the future. These inputs are then used in conjunction with scenario analysis to determine how achievable your goals truly are. As with any engineering, the better the inputs, the better the outputs. However, like the markets, not one of our clients has a crystal ball that enables an accurate vision of your future life. So, if the actual result will certainly be different then the predicted outcome, why go through a financial planning process at all? There are a few very good reasons.
Financial Planning Allows You to Make Decisions.
One of the key elements of a good financial plan is that it requires consideration of many different scenarios. In doing so, clients address life insurance, estate planning, long-term care insurance, tax planning, and investment planning for themselves and their family. This process often involves consideration of planning elements that end up being left out of the plan. For example, if you’re charitably inclined, you may review several options, such as a family foundation, an outright gift, and a donor advised fund, before selecting the one the best fits your circumstances. Or, you might consider several long-term care insurance options before deciding not to purchase the insurance. In going through this process, you are actively making informed decisions instead of defaulting to what is easiest or most commonly done.
Financial Planning Gives You a Framework for Future Decisions.
An optimist might envision every day of retirement looking like an advertisement- a beach, a glass of wine, and a good book. A pessimist might worry that retirement will be the opposite - health concerns, a poor economy, and declining markets. The reality for both groups is that retirement will probably involve some good and some bad. A thorough financial planning process will create a framework between a client and trusted advisor to use the same language and become familiar with the same tools. Then, when something unexpected occurs, we can briefly revisit the original framework and update it with the new information to get right to the results. For example, once you have a financial plan in place, the arrival of twin grandchildren can quickly be updated in your gifting plan, estate calculations, and legacy plan.
Financial Planning is Not Just Financial.
While the core of a good financial plan will determine whether you are on track to achieve your financial goals, a good financial planning relationship between advisor and client is about helping you articulate and achieve your life goals, both financial and non-financial. We fundamentally believe that money is one of several resources to help you accomplish what you want, while goals such as family relationships, community involvement, and pursuing a lifelong passion are often the non-quantitative reasons that people choose to retire when they do. A good financial plan should ask the questions and give you the answers to aid you in moving confidently and gracefully into the next period of your life.
We believe that you are the driver and we are the navigator when it comes to developing a plan for your personal circumstances and goals. At Allegiant, 100% of our Advisors, both on the Wealth Management and Investment teams, have earned the CERTIFIED FINANCIAL PLANNER™ certification. As CFP® professionals, we enjoy seeing you succeed in your goals and hope to be both a resource and supporter of your financial and non-financial goals. We encourage you to reach out to our financial planning team to make a plan for today, tomorrow, and wherever life takes you.
240 South Pineapple Avenue, Suite 200
Sarasota, Florida 34236
Telephone (941) 365-3745
Toll Free (800) 926-5237
Advisory Services offered through Allegiant Private Advisors, LLC, a Registered Investment Adviser