First, two points. One, I value the importance of sound financial planning advice that all clients of financial practitioners should receive. Two, I am not a financial planner.
However, the latter underscores my often stated premise that when it comes to tax planning, insurance planning and estate planning I have found in my career that recognized professionals in these fields are the best resource I have in my business outside, of course, my own skills as an investment planner. The reason is simple, the cacophony of simplistic phrases running from reaching your goals to comprehensive holistic advice (sounds like something from Star Trek), are the rallying cries of a generalist.
Now, to be fair, there are certainly many knowledgeable and experienced generalists who bring much to the discussion of a client’s planning needs. But our industry, who have begun to disproportionately cherish education over experience in a manner that ignores the successes of the past achieved by folks with far less than is respected in today’s intellectual sandbox. I bring this up because every time a politician or and besieged corporate head gives a public address there is usually a scholar nearby to lend credibility to the point. And nowhere is this tactic more widely used than in the world of finance. From the days when Wall Street was undermined by the so called “Quants”, highly educated mathematicians fresh from their academic gigs promising that their algorithmic (yes it’s use predates the 21st century) models will provide answers to many of our industry’s most vexing questions including when to buy and when to sell based on patterns of human behavior. History has recorded how that experiment worked out.
It’s also important to understand that investment planning is not enough and I know it. And the recent exercise of filling out the risk tolerance questionnaire, along with talking with you is to better understand your financial expectations, that through budget guidance and using modest assumptions when attempting to predict the future, what I refer to as overstating the debits and understating the credits, results in retirement projections and a plan for how investing can get you there. That, I believe is the cornerstone of comprehensive financial planning that doesn’t match products to dreams. And when including insurance, tax planning and attorney provided estate planning the likelihood is that most of my clients will never need all of those services.
And each quarter, each year, we revisit important milestones in your life, all aimed at helping you see where you stand and identify any changes that can to be made going forward. The process for staying on track needs to be flexible and ready for the unexpected, because the markets and especially life, rarely are.