This week we had a prospective client come in for an exploratory meeting. He was going to receive significant investable assets in a few months and wanted a financial plan that would ensure that he was not going to be overlooking anything in the future. He rightly came to a planning firm but received an answer that must have surely confounded him. We told him he did not need a plan; he needed a planning relationship.
In the infancy of our profession, financial planning was defined as literally the production of a document known as a financial plan. I remember producing documents that exceeded 100 pages and were wrapped in leather as a sign of legitimacy. Years later, after we burned out several printers, the plans got thinner. Unfortunately, they were still static documents.
As planning evolved, it became characterized as a process. In other words, we were moving off of a document and on to the necessity of updating the document on a regular basis. That was better, but in my opinion, it still missed the essence of true financial planning. Financial planning is about relationships. When a client engages the services of a planner, they should recognize that they are committing to an ongoing long-term relationship with the planning firm. Only by viewing planning services in the context of a long-term relationship can the client derive the promise of a better quality of life.
The production of a financial plan is merely the starting point for planning your present or future. There will be many turns in the road that your plan can never anticipate. Having a relationship with regular communication – whether by face-to-face meetings, phone calls or emails – helps to ensure that your plan reflects the reality of your current thinking and aspirations. What we have found is that the incisiveness and value of our recommendations is directly proportional to the depth of a relationship that we have with our clients. Quality financial planning is so much more than just a plan.
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