Holistic Planning: Is it For You?

What is “Holistic Planning”? The definition seems to vary depending on who you ask, especially since the trend seems to be evolving as “comprehensive planning” and “life planning” converge to meet the needs of today’s families. Holistic planning is the term used to describe the ultimate meshing of the two planning practices. More and more people want to make sure that their money will do what they want it to do during their lifetimes and are seeking advice (and putting together advisor teams) to reach those goals and leave a legacy as effectively and efficiently as possible.

Holistic planning involves every aspect of your financial life, and more. It is based on the premise that one can’t get the most value out of their money without first knowing what purpose(s) their money serves. As “touchy-feely” as this sounds, delving into your deepest desires, and even dreams, enables laser focus on reaching financial goals. Getting your family to agree on a purpose for family wealth now helps define the strategies necessary to create your legacy now and in the future. Redirecting expenditures is a lot easier when you have a clear picture of what your goals are and what can be accomplished with equal amounts of planning and discipline.

Holistic planning takes a multi-disciplinary approach to financial planning and involves developing a team of professionals who can deliver investment, retirement, and estate planning. All advisor teams should include a financial planner, preferably a CERTIFIED FINANCIAL PLANNER™ Professional (CFP®), a CPA, and an Estate Planning Attorney. Key players, in addition to those, could include a Business Attorney, Certified Valuation Analyst (CVA), Investment Broker, Insurance Agent, Business Broker, etc. However, coordinating such a team can be daunting and intimidating for the client, so the Holistic Planner acts as the liaison between the client and the advisor team.

A Holistic Planner excavates client passions, intentions, and objectives — it’s their business to know their client better than any other financial professional. What are the cash flow needs of the family now and in the future? What is their risk tolerance and investment perspective? When does the client want to retire? What is their exit plan for themselves and succession plan for their business? What do they envision as life after career or business? What legacy do they want to leave and to whom do they want to leave it?

The Holistic Planner, armed with clarity of the client’s purpose, intentions, values, and goals coordinates the advisor team’s efforts to develop a single, comprehensive strategic plan. That plan correlates the unique passions and purpose of the client’s life and financial resources with retirement, investment, and estate planning strategies entwined with tax and asset protection solutions. Aligning privately-held business goals with personal goals helps to create higher potential to design a successful succession plan, develop an optimum transition team, and realize retirement goals sooner.

In 1969, thirteen individuals met in Chicago to begin the development of the financial planning movement that evolved into the industry we know today. After talking with some of these pioneers, I believe their vision was a “holistic” one and was the seed of what we now call “holistic planning”. At that time, many brokers, advisors, and investment professionals merely constructed a portfolio based upon a few questions listed on the “Risk Tolerance Assessment Form” and a few minutes of chatting, and then proceeded to make investments based on the broker’s ability to produce a return. The focus and goal of the portfolio was primarily to obtain the highest investment returns, but didn’t always have the client’s best interest in mind, let alone their goals. These industry pioneers were intent upon creating the linkage between the client’s specific wants and needs and the purpose of the portfolio in the short and long term. Meeting a required rate of return to achieve client goals and objectives over a lifetime of changing factors became more of an issue than simply generating high returns or fulfilling a quota. As the industry matures, it is my hope that holistic planning will become the standard and those professing to be financial planning professionals will practice holistically.   Continue »

Page 1 | Page 2