Interactive financial planning
July 26, 2010
In working with financial planning clients over the past 20 years, we notice that they typically fall into one of two categories: the planners and the non-planners. The planners are business owners or families who have a tendency to make timely decisions and who have a plan in place. These individuals tend to have an array of advisers which could include a CPA, broker, attorney, insurance agent, and multiple financial advisers specific to each account. The non-planners tend to make decisions slowly (if ever), and they tend to focus on individual plan elements without ever incorporating them into a comprehensive plan. They may have an adviser through a close family member or at their local bank, but would not consider themselves as having a primary financial adviser.
Non-planners may feel that they have a plan in place, but the small decisions that they do make do not necessarily support the momentum needed to realize their financial goals. An effective financial plan needs to be an incorporated, interactive, living financial plan that reflects changes throughout your life.
As people attempt to develop financial independence, they tend to begin with a collection of good ideas. It’s a good idea to open a bank account. It’s a good idea to get some insurance. It’s a good idea to start saving for your child’s college education. It’s a good idea to start a business. You may go to see a CPA about your taxes, see an attorney to set up a will and trust. You may talk to a broker about your investments. These are all good ideas, but this is a fragmented approach because none of those advisers are necessarily talking to each other. You are left to play quarterback, architect, and chief designer without knowing all of the rightquestions to ask.
The key to getting on track for your financial independence is to have a comprehensive financial plan in place. Anyone can go out and get a financial plan done for anywhere from $5,000-$20,000. However, most of the time what you are going to end up with is a static plan. Your plan may recommend that you complete 25 different items in order to achieve financial independence. You may end up getting one or two of those items done and that’s it. Why? Because your life is full of variables. Within a short amount of time, that plan that you just paid $10,000 for can become obsolete. Tax structures might have changed, the economy might have changed, your family might have changed, and you’re stuck with a stagnant plan.
At MacLean Financial Group, we offer a live, interactive financial e-plan. The ability to offer such an interactive financial plan all started with the Internet and online banking. The Internet is providing education and self-help at the fingertips of millions of people each day. People can go to Google and search “Do I need a will and trust?” read about it for themselves, and look up a local attorney who can take care of that for them. What began with being able to check your account balances online has turned into financial institutions offering advice and analysis directly through their websites. They are able to track what users are searching for on their websites which allows them to call, e-mail, or put a pop-up on the Web site saying, “I see that you’re interested in opening an IRA. Would you like to be connected to a broker?” The virtual world is the adviser for the next generation.
Successful financial advisers are in tune to this transition toward technology as a vital element in the financial planning process, and they are embracing it.
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You can have the best ingredients in the world, but without the right recipe it will taste lousy. You can have a great life insurance policy, an estate plan in place, and a high-yield investment account, but without all of these elements combined together into one cohesive plan, all you that have is the individual ingredients. The key to a more efficient financial picture is the plan. In order to be meaningful, the plan has to be connected to all of the variable components in your life. This requires the development of an interactive planning process that communicates with all of your individual professional advisers to achieve a team approach in charting your financial future.
Hawley MacLean is founder and president of MacLean Financial Group in Reno. Contact him at 329-3041 or through http://www.macleanfinancialgroup.com.