The Lost Elements of Financial Planning

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Are you missing opportunities to deepen your client relationships or losing business opportunities in your planning process?

Many financial advisors and planners provide a comprehensive experience. However, I see cases where their primary focus is on answering the single question, “Do I have enough?” As we know, this generally means whether one can support their lifestyle until they die in a reasonable form with their financial resources. “Enough” is a separate discussion. This article is about the need to discuss the “what ifs” before they become “what nows.”

Often, the answer refers to a household situation where there is a couple in their 50s, 60s, or 70s and we are mapping their anticipated financial needs assuming conditions as they exist today:

  • A couple;
  • Reasonable health; and
  • Good knowledge of their inflows and outflows.

But there are at least six “what ifs” that need to be part of the planning conversation before they become “what nows.” Asset-Map calls them “the six L’s” that summarize the events that commonly change the course of financial well-being:

  • Liquidity needs
  • Long-term disability events
  • Loss of life
  • Long-term care events
  • Longevity (long-term cash flows)
  • Legal/liability

Your financial planning process must include initial and on-going conversations with clients to discover their plans and approaches to dealing with significant events that are tied to their well-being.