Financial Planning & Wealth Management

What is a Financial Plan?

Most people have a clear idea of what is involved with Money Management: buy this…sell that…repeat. Fewer people understand what is exactly involved with Financial Planning. To be sure, both processes are important to help you reach your financial goals, but, to do one without the other can lead to problems. Money management is a component of financial planning. Financial planning, in contrast, is a holistic and ongoing process that incorporates multiple planning disciplines: taxes, insurance, estate transfer and, of course, investment management. Proper financial planning will follow an ongoing six step process:

1. Establish and define the client-planner relationship

You should have a clear understanding of what your advisor will do for you and what these services will cost. You will also want to be sure you understand any conflicts of interest your advisor may have that cause his or her goals and motivation to not align with yours.

2. Quantify your financial picture

If you are to construct a clear view into your financial future you will need to start with a complete and accurate snapshot of your current financial picture. This breaks down to an analysis of your resources and goals:


  • Income: current and projected
  • Assets: retirement accounts, savings, brokerages accounts, 529 plan, etc.


  • Large purchases
  • College funding
  • Retirement
  • Etc.

3. Develop a plan

Each goal you define should have two components: (1) how much it will cost and (2) when will that money be needed. Once you have these two data points for each goal, you can plan how to deploy your resources to meet the goals. Here are a few examples:


Time Horizon (in years)

Investment Mix

Down payment for a house



College funding for your 8 year old child



Retirement income



By establishing a unique portfolio for each goal you will be able to develop, monitor and adjust your investment mix so it stays aligned with its defined time horizon. This technique of “firewalling” assets is the cornerstone of proper planning.

During the development of your plan, your advisor should also review ways to make your entire financial position more efficient and address risks that may throw your plan off course. Specific areas that should be considered include: Income tax, Estate transfer, and Insurance.

4. Understanding your plan

You should expect some type of written analysis from your advisor that clearly summarizes the assumptions made. These assumptions will generally fall into three categories: (1) Income (2) Expenses (3) Rate of return on investments. At the end of the day all financial plans break down into these three moving parts. As a rule, you will want to be sure these assumptions are conservative: underestimate income, overestimate expenses and, of course, use investment returns solidly based in reality -- not fantasy.

5. Implement your plan

Most CERTIFIED FINANCIAL PLANNER™ practitioners are able to directly implement the plans they construct. As a general rule, most CFP® professionals are money managers, but, the majority of money managers are not necessarily CFP® professionals. Regardless of who you choose to manage the implementation of your financial and money management plans, here are some things to look for:

Costs count: Have a clear understanding (in writing) of what fees you will be charged for all aspects of your engagement with the advisor: planning, implementation, monitoring.

Watch out for bias: Does your advisor have any potential conflicts of interest? Does he or she work in an environment that has proprietary financial products for sale?

Get a second opinion: Your financial well being may be second only to your physical well being. Even if you have a plan in place currently – would it make sense for you to consider a second opinion about your household’s financial future?

6. Monitor your plan

Be sure your written financial plan does not become your most expensive coffee table book. You and your advisor will want to have a process in place that monitors your investments to be sure they remain on the path laid out in your plan. If a plan is made and updated yearly you can have a clearer view of what your financial future will look like and maximize your chances for investment confidence while helping to mitigate risk.

Components of a Financial Plan

Financial Planning
Financial planning is the cornerstone of the work we do with clients. Before we begin investing, we compile a detailed analysis of their current resources (assets, liabilities, income, etc.) and match those resources with their needs, both current and future. By performing this formal analysis and putting it on paper, we are able to guide our clients on how to best deploy their resources to help provide for retirement. We have also found that written plans help our clients internalize the planning process which leads to a higher level of comfort regarding their financial future.

Many people view investment management and financial planning as synonymous topics -- we disagree. In fact, we believe that the only way to deliver proper investment management guidance is to first have a thorough understanding of what our clients’ plans are. As such, we devote much of our time to collecting information on our clients’ needs and goals and use that information to frame the investment suggestions we make. Once the investment plan is in place, our work then shifts to monitoring both the investment portfolio and our clients’ ever changing needs. By continuously matching the investment allocations with our clients’ evolving objectives, we can be sure our recommendations remain in line with our clients’ long and short term goals.

Estate Planning
We view estate planning as a process of assuring your hard earned wealth transfers to your heirs in the most efficient way possible -- our primary focus is the potential minimization of taxes and estate transfer fees. We address such topics as: “Do I need an estate plan? What types of trusts will serve my family best? How can I protect my assets now and after I am gone?”

Tax Planning
Proper tax management involves more than filing a return every year. Any taxpayer, regardless of income level, can benefit from planning and the exploration of various tax strategies. As part of our complete financial planning process, we review tax-saving strategies, tax shelters, tax breaks for the self-employed, tax-advantaged investments, AMT and income-shifting ideas.*

College Planning
“How much will it cost to send my child to college? How am I going to pay for it? Will I qualify for financial aid?”

In addition to answering those important questions, we also help sort through the complex and often conflicting college tax incentives and programs such as prepaid tuition plans, 529 Plans, the education IRA, and the Hope Scholarship and Lifetime Learning credits.

“Do I have enough insurance? Do I have too much?”

No comprehensive financial plan is complete without a review of a client’s risk management portfolio. We review our clients’ various insurance policies (life, disability, long term care) to be sure what they have is a match for what their true needs are. We discuss the importance of choosing the right types and right amounts of insurance that fit the client’s overall financial picture. During this process we find that some clients are actually over-insured while others very much underinsured. Either of those scenarios need to be addressed and worked into a client’s final plan.