Financial Planning is a Process, Not an Event

It’s easy for most investors to remember the more important financial decisions they’ve had to make in life. These decisions often involved larger sums of money or came at a time when they were especially anxious about their financial future.

It’s at times like these that many investors seek out the help of a financial adviser. While most people would acknowledge that doing financial planning is an important practice, it’s only when it becomes urgent that they take time out of their busy schedule to meet with a professional.

In the work that I do, approaching retirement is a significant trigger.

The Beginning of a Life-Long Process

It’s typical for investors to go into these experiences with the expectation that their questions would be answered and that the process would have a firm ending. However, while seeking professional advice is often triggered by an event, what I have found from working with hundreds of families over the years is that it is only the beginning of a life-long process.

For a start, even an isolated decision requires that your complete financial situation be understood. This process of data collection and analysis inevitably reveals other areas that can be optimised. It’s not unusual for us to make a series of sensible recommendations at this early stage. In practice, the more important decisions are prioritised, but for those investors open to forming a long-term relationship with a trusted adviser, this list is worked through over time.

By the time the initial list has been actioned, something has inevitably changed. It’s not unusual for a family to have developed new goals or aspirations due to the work that has already been done. Perhaps the possibilities that good financial planning and investing can facilitate have planted a seed in their heads that they want to explore. Perhaps there has been a change in retirement plans, or they are now comfortable revealing more personal details about their personal circumstances. Of course, there are often change in the tax legislation or inflation rate to reflect in a plan. In other words, life happens.

Embrace the Iterative Process

Like a pilot setting off for the destination, knowing that course corrections will need to be made along the way, a financial plan without regular reviews and adjustments only remains relevant for a short time.

In the financial planning relationship, the client and the financial adviser must appreciate the value of the iterative process that good planning becomes. While it’s my role to bring the possibilities and technical expertise to life, the client must engage in the process with openness and mutual respect. With these elements present, this relationship can provide a lifetime of value to the client and rewarding work for me and my team.

It's tempting to believe that help can be pulled in only when you really need it, but the value of an ongoing thinking partner and guide cannot be overemphasised, as Paulo Costa explained. If the process and relationship I’ve described is one you’ve never experienced, I encourage you to consider the possibilities this could open up for you and your family. My desire is to bring clarity and confidence to more families as they journey towards a successful retirement.

If nothing else, I’d like you to remember that when done right, financial planning is a lifelong iterative process that requires constant work.