Oftentimes when high-net-worth individuals are first looking to hire a financial advisor, it’s for investment help. But the best wealth management goes far beyond portfolio returns.
If you want lasting financial success, building wealth in a vacuum without strategy isn’t enough. You need a comprehensive financial plan that integrates every part of your financial life into one cohesive roadmap.
A trusted wealth manager guides every piece of your financial plan, including your investments, tax strategies, and estate planning, with your long-term goals.
Here at Plancorp, we use a structured financial planning process to fully understand our clients' current financial situation, prioritize their financial objectives, and recommend strategies to protect and grow their wealth throughout their lives.
If you’re curious what that process looks like, this article will walk through the 8 essential elements every comprehensive financial plan should include.
The foundation of effective planning is understanding you: your values, priorities, and financial circumstances. Your financial planner should take time to fully understand:
This deep dive into your current financial situation ensures your financial strategies are tailored to your life, not a one-size-fits-all template.
Financial planning is about pursuing your goals—which means identifying not just what you want to achieve, but when you hope to get there. Timing is a key puzzle piece that your financial plan must address. Goals should be clearly articulated and prioritized.
For example, a younger person might map out:
People later in their careers might have different goals and timelines:
Much like a doctor can’t prescribe treatment without diagnosing the patient, advisors can make investment recommendations without a complete understanding of your current financial situation, objectives, and constraints.
The most important investment decision is determining the mix of assets needed to meet your goals and objectives—a process that incorporates both your ability and willingness to tolerate risk.
Ability to tolerate risk is objective and determined by your financial capacity. But your willingness is more subjective, so your advisor must ask the right questions to measure your emotional comfort with various forms of risk.
Depending on your specific situation and your personal tastes and preferences, an advisor should be able to offer a variety of strategies to meet your goals. At Plancorp, we adhere to an evidence-based investment philosophy. More on that here.
Some investors are best served with the simplest, lowest-cost portfolio available.
Others have the capacity and circumstances to tilt their portfolio towards riskier assets in hope of earning higher returns over time.
Others may want a strategy that emphasizes companies that do well on Environmental, Social, and Governance (ESG) issues, so their portfolio aligns with their values.
Regardless, we partner with our clients to ensure you’re appropriately diversifying, reducing unnecessary risk exposure, and maintaining affordable fund choices that don’t put a drag on your returns.
Nobody can predict the future, but future economic conditions will have an impact on your ability to meet your goals. Rather than targeting one possible outcome for the goals in your plan, your advisor should stress test each one by running it through a range of different market scenarios.
The process is called a Monte Carlo simulation, which runs a thousand scenarios to generate a probability that your plan will be successful.
As you change the inputs of your financial plan, you can see how they change your likelihood of success. That’s the power of Monte Carlo Simulations: They give you a framework to translate chances into choices.
Insurance is a critical part of your plan because it can help keep your family’s finances on track should something happen to you or your spouse. Your advisor should analyze any current policies you have in place, including:
This ensures your loved ones and your financial future are protected without overpaying for unnecessary policies. You’d be surprised how an unexpected injury, illness, or even death can derail the finances of a family for years if not properly planned for.
A strong estate plan safeguards your legacy and ensures your assets transfer according to your wishes. A financial advisor should:
A visual flowchart of your asset distribution can give you peace of mind that your financial strategies truly reflect your intentions.
Tax efficiency can significantly impact your net worth over time. Your advisor should incorporate tax planning strategies such as:
Working alongside your CPA, your advisor ensures your financial planning recommendations minimize tax drag and maximize after-tax returns.
Your comprehensive financial plan isn’t a one-time document—it’s a living strategy. Your financial advisor should schedule regular reviews to:
This proactive approach ensures your financial well-being stays on track, no matter how your financial circumstances evolve.
A complete financial plan is more than a checklist—it’s a roadmap for your financial success that adapts as your life changes. By working with an experienced financial professional, you can make confident, informed decisions that protect your wealth, support your goals, and secure your financial future.
Schedule a strategy session with one of our fiduciary advisors to see how a tailored financial planning process can help you achieve lasting financial success.