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Why it’s Important You Guide Clients Through Their Financial Plan


In our last article, we discussed the importance of having a financial plan and using it as a guide to help you better navigate volatile times. Now that you have the plan in place, you need to know how to guide clients through the plan and address all the areas important to your client.

Jul 14th 2020
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The importance of the plan is to provide you and your client with a roadmap on how they are progressing, reaching and realizing their goals. Once you have this in place it is important to make sure you monitor and evaluate your clients' progress over time. 

When you first put the plan together and even going forward, there will be items that need to be addressed that may impact the future success of the plan. Every client is different and you will want to make sure that you create a list of action items for them.

Also, have them prioritize them in a way that is indicative of what they feel is most important. This provides them with a way to address their issues in a way that they can control.

Here are a few areas within the plan that you will want to make sure are reviewed and prioritized with the client:

1. Investments

These are all questions that should be addressed as part of the investment process:

  • Is the client on track with their savings plan to reach their goals?
  • When the client is on track, does anything in their current investment plan need to be fine-tuned? 
  • If clients are off track, what is needed to get them back on track? 
  • Do they need to save more or spend less?
  • Should they adjust the risk profile of their portfolio to meet their risk tolerance?

2. Tax Planning

Now that your client has a plan in place it should provide you with a good overall view of their entire financial situation. Are there things that should be addressed from a tax planning perspective?

As an example, are there ways for the client to reduce their taxable income by saving more money pre-tax through their current or a different retirement plan?  Reviewing this component of their plan will allow you to truly shine and show the value you can add now that the plan is in place.

3. Debt Management

Most people have some form of debt or liabilities. A home mortgage is the most prevalent form of debt incurred by clients. Student loans, personal loans, lines of credit and others could exist as part of a client’s financial situation. 

Managing debt appropriately can have a sizable impact on a client’s financial situation. Simply managing debt incorrectly could put them in a dire situation from which they may never recover. Moreover, helping them navigate this part of their plan is vital to their financial success.

4. Insurance Review

Income, earning potential, health and risks to a client’s assets are all important components to a plan.  The way to protect your client from the impact due to the loss of income or a health risk would be the use of insurance. 

You will want to review the current coverage, or lack thereof, your client may have. Depending on the scope of your client’s net worth, there may be other insurances that should be reviewed or discussed during the planning process.

5. Estate Planning

Clients work hard and long to accumulate assets and provide for their families. Ultimately, upon their demise, they will want to make sure their assets are distributed to the family, people and charities that they want them to go to. 

In addition to making sure they go where they want, they will also want to be sure they get there in the most tax-efficient manner possible. You will want to guide your client, with the assistance of an estate planning attorney, in reviewing their current plan to make sure it will provide them with what they expect upon their demise or have them craft a plan that will execute the distribution upon their passing the way they want.

Many of our clients set out on a path with certain retirement goals in mind.  They certainly know that they will need to save, invest, and address financial concerns over time to get there.  In many instances, this is a reactive process where they address things when there is an issue rather than being intentional with their plans.

Final Thoughts

Helping your client layout out their plans for their future can be a very rewarding experience for them and also put you in a position to better assist them over time. Developing the plan is the first step and then you must guide them through all the areas that the plan entails. 

This is certainly not something that can be tackled in a weekend, but one that will take time. People's goals, objectives and financial situations are constantly changing and the plan will act as a framework for them to follow and update over time. 

The financial plan will elevate you to a place where you can be far more proactive and begin to anticipate issues your clients may encounter based upon what they want to accomplish. You will want to update and review the plan over time so it remains relevant and a true representation of the client's situation. This will also give you the ability to provide better guidance and a way to evaluate the impact of financial decisions on your clients' overall plans.

The next time your client wants your guidance on making a financial decision you will be in a much better place to provide that guidance in the context of their overall plan.

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