What is a financial life plan ?

Here is a questions often asked – what is a financial life plan, and why would I need that as opposed to a financial plan?  

More and more consumers are understanding that there is a difference between the old way of financial advice (selling as many products as possible) and financial planning (where recommendations are able to demonstrate that they are relevant and appropriate for the long term).

So where is Financial Life Planning different?

Number people take comfort in numbers.  Tax implications, anticipated returns, critical yields, all these things have a huge bearing on your long term financial future, but are they all that matter?  Basically, no, they are not.

There is an old saying – ‘don’t let the tax tail wag the investment dog’ or putting it another way, just because something is tax efficient, that doesn’t mean that it is the right thing for you.  The same can be said for investing, for saving, for long term tax planning, in fact almost every ‘key selling point’ which those slick salesmen of the past dangled in front of you, and which, sometimes, many planners still focus on.

A typical referral from an accountant to a financial planner may have already lead the client to be focussing solely on tax savings, yet there could be something far more fundamental going on in their lives which warrants attention (and the financial structure to help that happen).

Here is where Financial Life Planning takes a sudden diversion from what you may have come to expect from the financial professions.

Instead of focussing just on the money (which after all, is only there to enable you to do things – either now or in the future), meaningful discussions about what is really important to you can start to unearth some hugely relevant plans and aspirations which may have become buried for years. Additionally, there may be some issues which are causing some real anxiety, usually which in some way have a connection to finances.

Very few people wake up worrying about the intricate mechanics of their pension funds, yet may be wide awake wondering at 3am if they will ever be able to afford to escape the rat-race and live on that small-holding by the sea they always dreamed of.

None of all the clever financial planning in the world will make a difference if the key things in clients lives are not addressed, and worries or regrets dealt with.

So to put it in to context, have a think, and write down the three things which are causing you financial worry at the moment, and now, the three things causing the greatest personal worry.  Would working on one bring more clarity to the other?  Would you normally expect to have a conversation about the personal stuff with a financial person – maybe your bank manager (remember them) or your accountant?

Yes, tax strategies and highly sophisticated financial plans have their place and can move you quicker along the financial path.  First however, you need to figure out which path it is you need to take, and sometimes, whether you need to take any path at all.  Once that is figured out, then the relevant strategies and approaches are all there to help you.

This is what a financial life plan basically is – a way to move you closer towards what genuinely are the most important things to you, and then working with someone to keep you moving in that direction, whilst appreciating where you already are.

The pursuit of more is not always the path to follow, what if ‘enough’ is right now, you are just too busy to see it?

Together we can bring some Serenity to your life


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