The 6 Pillars of Financial Planning - Kelowna Investment Brokerage

The 6 Pillars of Financial Planning

Kelsey Serwa visit to Insure Wealth Kelowna
Supporting Local Kids with Kelsey Serwa
September 19, 2018

Could my spouse realistically step into running the family business?

What’s the best way to save for my children’s education?

Should I sell my share of the business to my partner at retirement?

While everyone’s goals are unique, it goes without saying that your financial future is top of mind.

Everyone, whether they’re setting themselves up for retirement or saving for their children’s education, benefits from some level of financial planning.

 

InsureWealth Financial Planning

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1. Establish the Relationship

The first time you meet with an advisor, you’ll gain an understanding of the overall concept of financial planning, answering questions like:

  • What processes will we follow?
  • What are the Financial Advisor’s qualifications and responsibilities?
  • What are the client’s responsibilities?
  • Are there any conflicts of interest or business affiliations to be aware of?
  • Will we require the services of other professionals, such as lawyers, accountants, or investment experts?

At this stage, we define the terms of engagement, detailed in a document called a Disclosure and Engagement Letter.

Understanding the advisor-client relationship

Because Financial Advisors play a unique role in helping you face fundamental, life-altering decisions, a advisor must show themselves to be a trustworthy, reassuring professional resource that you can rely upon throughout life.  

At the same time, you, as the client, must also be willing to make specific, difficult decisions about future goals. Tough decisions, such as resolving conflicts of interest between family members or business associates, require energy and attention from both the client and the advisor— flexibility and commitment are must-haves in a strong advisor-client relationship.

2. Determine Goals & Expectations

This is the information-gathering stage.

Here, your advisor gains a full understanding of your priorities, values, attitudes, preferences, and expectations, in addition to compiling more straightforward, tangible data like financial statements, investment lists, and other financial documents.

Helping you define your financial goals

When you say you’d like a “comfortable retirement”, what do you mean?

Your Financial Advisor will help you define your objectives in more concrete terms. For example, a “comfortable retirement” for you might mean: pre-tax monthly income of $6,000, starting at age 60 and continuing until your spouse, who is 5 years younger than you, turns 90.

3. Clarify & Identify

Here, your advisor takes a deeper dive into your financial status, identifying potential problem areas as well as opportunities.

They assess a broad range of financial health measures, including:

  • Capital needs
  • Risk management
  • Investments
  • Taxation
  • Retirement
  • Employee benefits
  • Estate planning
  • Divorce/marriage consideration
  • Charitable planning
  • Adult dependent needs
  • Disabled child needs
  • Education needs
  • Terminal illness planning
  • Closely held business

 


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4. Develop & Present

At this stage, we present you with a financial plan specific to your goals.

With your advisor, you’ll decide where to meet and who should attend the meeting (spouse, business associate, etc). Prior to the presentation, your advisor may suggest preparatory steps to help you learn more about a given topic, such as retirement or investing, so that you will feel prepared during the presentation.

Far from a one-size-fits all solution, your plan factors in range of variables, including your:

  • Risk tolerance
  • Desired level of involvement in the process
  • Financial experience and knowledge

Your advisor will also communicate the varying effects of inflation and interest rate projections, in addition to any environmental and economic factors beyond your control.

5. Implement

An Implementations Plan will detail the steps to take for making each part of your financial plan happen.

With your advisor, you’ll go over documentation that shows the required action to take, its time frame, and the name of the person responsible for doing it. Some actions can be done by the client, while others are shared with the advisor. If the action requires the assistance of lawyer, accountant, insurance agent (etc), this is noted in the Implementations Plan as well.

6. Monitor

Developing a financial plan is not a one-time event. Periodic reviews are required to monitor and evaluate your progress, identify and adapt to any changes (personal circumstances, new tax laws, etc).

Are your outcomes meeting your expectations?

One of the most valuable things a Financial Advisor offers is their professional commitment to your financial goals over the long-run. Monitoring your plan and outcomes over the long-term, they help you adapt to the inevitable changes in life.

All in all, your Insure Wealth Financial Advisor wants you to feel confident that you’re on track to achieve your goals. With a robust financial plan, your progress towards life goals will be validated by an experienced professional who understands the big picture of finances and life.

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