Rattiner's Secrets of Financial Planning

CHAPTER 3Developing a Well-Thought-Out Personal Financial Plan

The purpose of the financial planning process is to provide a well-thought-out plan based on the planner gaining an understanding of client wishes and desires to help determine whether they can then become client realities. An understanding of what those client issues are, coupled with any exposures that may put them at a greater risk, and the ability to find appropriate solutions to determine a path toward those objectives, makes for a well-thought-out plan. Our role as an advisor is to understand and realize those paths.

Clients need to seek a coordinated approach to the multiple facets of the daily and lifetime financial needs of clients. Some clients may be too busy to learn what they need to know, some may want to defer to the experts, others simply want you to do it with minimal involvement from them. That certainly is the wrong way to proceed.

Like the financial planner, the client should understand what is expected of them up front and as a part of entering into the relationship with the planner. To be successful, clients need to have “skin in the game.” They have to proclaim ownership. They have to understand the ins and outs of the financial decisions affecting them. As I say to my students, your clients need to use a similar approach. It's one thing to be a part of the process; it's another to receive direction without a true understanding of how it could affect them if things don't go as expected. Clients ...