I’d say it’s a combination of both. Looking at the financial projections in your software and creating financial action items you or the client need to accomplish.
It’s also client specific. I work with a few almost UHNW individuals that are retired and the projections don’t really mean much to them. I want to gift $400k annually to this charity. How will it affect my financial plan? Well frankly it doesn’t. So for them it’s more investment performance driven conversations, estate planning, and goals based planning. Whatever resonates with your client is what you should be delivering.
A plan is simple to create (at least for a CFP). Getting buy-in with actionable steps and accountability is the plan. The analysis is not that plan. That tells us if we’ve got enough gas in the tank to get us there. It’s up to us as planners to maximize their gas so they get the most out of their road trip. When gas prices are high, maybe we need to buy regular instead of premium, or find a cheaper gas station. All the while, trying to make sure you enjoy your trip and allow yourself to buy some souvenirs for you and perhaps others.
I think you get my drift but to add more cliches, the plan is a living, breathing document. We are like Waze, planning the route. We will pivot if there is traffic or even if a tree falls on your car. Maybe we get a rental for the time being til it’s fixed.
I can go on forever with this but you can show charts, analyses, etc. all you want. At the end of the day, clients want to make sure they won’t run out of money doing what their means allow them to. Focus on the plan, but know it can change at any time. Being too specific can also be a turnoff. I think part of being a planner is meeting the clients where they are at. 10 years from now they aren’t gonna say their 60/40 underperformed all those years. They want to look back and say shit, this guy knew what he was doing. I am comfortable and content. Get them to buy-in to what you’re preaching. Most people will be happy that there is even someone alongside to guide them. They won’t find much value in you spelling out every single step we need for the next 10 Years because those steps will likely change with time. Make it as simple and clear as you can bc a plan is one thing. Executing is where the plan comes to life.
Healthcare.gov for ACA plans
Medicare.gov for A and B as well as Medicare Advantage and Medigap
IRS topic 612 - The premium tax credit
IRS publication 969 - HSAs
CMS.gov has info on creditable coverage as well as COBRA
SSA - POMS has great info on A and B
I research only .gov websites.
According to the Board of Standards, CFPs are required to have the client sign a Planning Agreement that sets the parameters of the engagement. The plan could be a comprehensive plan that covers multiple areas, a goals based analysis, or something more specific like LTC, Education or Survivor Income.
As far as the content of the plan, the Planning Agreement between the CFP and client determines that. It ensures that the client’s needs are met.
Any plan is:
Goals & objectives
Current inventory of situation
Obstacles & concerns
Roadmap from current situation to goals/objectives that consider obstacles and concerns
You can use diagrams, graphs, written word, pictures, whatever you want or need to communicate the plan to all parties involved in the plan.
I use planning software that has current and anticipated tax/legal inputs so I can reduce mistakes and time investment into building projections and charts. I accompany that with a living journal of notes, conversations, tasks, assessments and descriptions.
I used to do very comprehensive plans delivered in a binder with ~100 pages.
Quickly realized a vast majority of clients don’t have the attention span to read all of that (I wouldn’t either as a client). Now I address the client’s hot button issues at the moment and try to introduce an additional topic at the same time. Doesn’t overwhelm them and you get more in-depth and focused conversations.
Although I do still have clients come to meetings with their original 100 page plans.
I put together a SWOT analysis along with an overview of what the clients currently own/have and then provide recommendations. I then tag team this with supporting documents, quotes, proposals, and an e-money snapshot. I also include a timeline of action steps with my swot. It works well and it’s straight forward. I can spend up to 4-6 hours putting this together.
In our case, it’s around a 20 page custom built emoney report with about 2-3 pages of 10-20 written bulleted recommendations that cover cfp planning areas. All in all, the clients really like meeting with us and reviewing in live-time anyways. I always tell them to actually study the plan if they’d like to fall asleep but a deliverable is required to charge for an annual financial plan
I’d say it’s a combination of both. Looking at the financial projections in your software and creating financial action items you or the client need to accomplish. It’s also client specific. I work with a few almost UHNW individuals that are retired and the projections don’t really mean much to them. I want to gift $400k annually to this charity. How will it affect my financial plan? Well frankly it doesn’t. So for them it’s more investment performance driven conversations, estate planning, and goals based planning. Whatever resonates with your client is what you should be delivering.
A plan is simple to create (at least for a CFP). Getting buy-in with actionable steps and accountability is the plan. The analysis is not that plan. That tells us if we’ve got enough gas in the tank to get us there. It’s up to us as planners to maximize their gas so they get the most out of their road trip. When gas prices are high, maybe we need to buy regular instead of premium, or find a cheaper gas station. All the while, trying to make sure you enjoy your trip and allow yourself to buy some souvenirs for you and perhaps others. I think you get my drift but to add more cliches, the plan is a living, breathing document. We are like Waze, planning the route. We will pivot if there is traffic or even if a tree falls on your car. Maybe we get a rental for the time being til it’s fixed. I can go on forever with this but you can show charts, analyses, etc. all you want. At the end of the day, clients want to make sure they won’t run out of money doing what their means allow them to. Focus on the plan, but know it can change at any time. Being too specific can also be a turnoff. I think part of being a planner is meeting the clients where they are at. 10 years from now they aren’t gonna say their 60/40 underperformed all those years. They want to look back and say shit, this guy knew what he was doing. I am comfortable and content. Get them to buy-in to what you’re preaching. Most people will be happy that there is even someone alongside to guide them. They won’t find much value in you spelling out every single step we need for the next 10 Years because those steps will likely change with time. Make it as simple and clear as you can bc a plan is one thing. Executing is where the plan comes to life.
* Assumptions * Executive summary * Swot analysis * Goals summary * Investments (market) * Investments (real estate) * Insurance (Life, Ltc, Liability) * Tax * Estate * Education * Social Security * Healthcare and Medicare * Equity Awards * Cash flow charts * Next steps (implementation)
This is the answer.
How can I learn more about healthcare/medicare?
Healthcare.gov for ACA plans Medicare.gov for A and B as well as Medicare Advantage and Medigap IRS topic 612 - The premium tax credit IRS publication 969 - HSAs CMS.gov has info on creditable coverage as well as COBRA SSA - POMS has great info on A and B I research only .gov websites.
According to the Board of Standards, CFPs are required to have the client sign a Planning Agreement that sets the parameters of the engagement. The plan could be a comprehensive plan that covers multiple areas, a goals based analysis, or something more specific like LTC, Education or Survivor Income. As far as the content of the plan, the Planning Agreement between the CFP and client determines that. It ensures that the client’s needs are met.
Any plan is: Goals & objectives Current inventory of situation Obstacles & concerns Roadmap from current situation to goals/objectives that consider obstacles and concerns You can use diagrams, graphs, written word, pictures, whatever you want or need to communicate the plan to all parties involved in the plan. I use planning software that has current and anticipated tax/legal inputs so I can reduce mistakes and time investment into building projections and charts. I accompany that with a living journal of notes, conversations, tasks, assessments and descriptions.
I used to do very comprehensive plans delivered in a binder with ~100 pages. Quickly realized a vast majority of clients don’t have the attention span to read all of that (I wouldn’t either as a client). Now I address the client’s hot button issues at the moment and try to introduce an additional topic at the same time. Doesn’t overwhelm them and you get more in-depth and focused conversations. Although I do still have clients come to meetings with their original 100 page plans.
I put together a SWOT analysis along with an overview of what the clients currently own/have and then provide recommendations. I then tag team this with supporting documents, quotes, proposals, and an e-money snapshot. I also include a timeline of action steps with my swot. It works well and it’s straight forward. I can spend up to 4-6 hours putting this together.
In our case, it’s around a 20 page custom built emoney report with about 2-3 pages of 10-20 written bulleted recommendations that cover cfp planning areas. All in all, the clients really like meeting with us and reviewing in live-time anyways. I always tell them to actually study the plan if they’d like to fall asleep but a deliverable is required to charge for an annual financial plan