Holistic Financial Planning Puts You First

To many people, “financial planning” is all about the numbers; how much to buy, how much to invest, how much to save. Many of the professionals in this industry believe this too… that ensuring the financial wellness of a client can be achieved through the right combination of products and formulas. While these tools are important, they are only one piece of the metaphorical puzzle.

“Most consumers receive financial advice when they are in the market for a financial product or professional service. They choose a course of action when they make a buying decision, but rarely do so with any strategic plan.”[1]

Without knowing what motivates clients to engage their services – the overarching goals and fears – it is difficult for any professional to see the “whole picture” and make suitable recommendations.

“‘Holism’ is the idea that various systems should be viewed as wholes, not merely as a collection of parts.”[2] Holistic or comprehensive financial planning then, is an approach to planning that incorporates the quantitative and the qualitative – the numbers and the emotions – in order to create a plan which captures the full scope of a client’s needs.

“The holistic financial advisor’s in-depth knowledge of the client’s life can yield a coordinated financial plan that efficiently moves the client toward their financial and life goals.” [3] Above all else, the holistic planning process is “client-centric.”[4]

In their report, “The Holistic Financial Plan,” Kelly Adams and Ken Robinson discuss the issues that arise when various, unrelated professionals – financial planners, lawyers, accountants, investment advisors – operate independently, only viewing the needs of a client through the myopic lens of their specific profession.

For example, problems arise when an investment advisor recommends that a client with seemingly unallocated cash in their corporate bank account, invest in an aggressive portfolio. Unbeknownst to the investment advisor, the funds are meant to fund a corporately owned life insurance policy and the financial planner has recommended the client keep those “redundant” funds in the corporate bank account (and out of the market) because of risk management planning.

Regardless of how well the investment advisor manages those funds, the risk associated with a potential downturn in the market means risking the long-term goal. In this case, the client receives contradictory information and feels more confused after seeking advice than they did beforehand. This example illustrates an opportunity for multiple advisors to work collaboratively and prioritize helping a client reach their financial and life goals.

Three Elements of Holistic Planning

Firstly, by taking the time to get to know a client, advisors are able to identify not only immediately obvious needs like having an adequate amount of life insurance, but they are also able to uncover hidden or less obvious needs. If a financial planner knows, for example, the client’s family dynamics and the personalities, shortcomings and concerns involved, they would be able to determine the best strategy for disbursing an estate while also being mindful of anticipated tensions or stresses between certain family members.

Secondly, a planner who believes in a holistic approach knows how important it is to communicate and collaborate with the other trusted professionals on the client’s team. When everyone is on the same page, they can all provide congruous recommendations to better support the client and their goals.

Lastly, holistic planning demands a larger, more diverse breadth of knowledge than what has traditionally been expected of financial planners. The aim is not to replace the accountant or lawyer, but rather to be able to strategically identify planning opportunities that may otherwise fall outside of a financial planner’s expertise. The holistic planner can ensure the client has access to necessary resources by directing them to seek needed advice from other appropriate professionals.

The combination of these elements is holistic or comprehensive planning, and the result is a client-centric approach that accommodates your unique needs, whether they are obvious or yet to be determined. For help establishing a comprehensive financial plan and ensuring all your trusted professionals are on the same page, connect with us.

[1] Adams, Kelly, and Ken Robinson. “The Holistic Financial Plan.” Retrieved from https://www.acplanners.org/acpmainsite/consumer/media/holistic-financial-plan

[2] Holism. Retrieved from https://en.wikipedia.org/wiki/Holism

[3] “The Holistic Financial Plan”

[4] “The Holistic Financial Plan”