Financial planning means different things to different people. For an investor, it may mean protecting a portfolio from a bear market. For a family, it may mean managing the budget so that high interest is not charged on short-term credit card loans. For an employee, it may mean that a retirement program will have enough cash to provide a comfortable post-employment lifestyle.
Holistic financial planning covers all of this and more so that a financial plan is tailor-made and unique to each individual client.
Holistic financial planning covers all aspects of a person’s financial life. It will consider taxes, insurance, investments, estate planning, retirement planning, long-term savings, budgeting, and college funding. A holistic financial planner will get in-depth information about the client so that an overall program can be developed to adhere to a specific long-term goal while considering short-term needs.
Clients of holistic planning do not get a “cookie cutter” program. They receive a plan that can be motivated by socially conscious investing, or one that can be aggressively managed for asset growth, or anything in between.
The big advantage of holistic planning is that there is a cohesive program underlying a person’s financial health. It is not a hodgepodge of various plans that attempt to form a finance foundation. In the past, clients would have an insurance agent, an investment broker, a tax preparer, and other financial professionals. Although this method did accomplish individual goals, it may not have been efficient. Today, holistic planners are knowledgeable about all areas of financial preparedness and work to develop a unified program that will accomplish the client’s goals and needs.
Finding a holistic financial planner is relatively easy. Many of the credentialed representatives have extensive knowledge of this type of planning through their studies as they were earning their designations and as part of their ongoing continuing education.
However, not all planners follow the holistic approach. It is important that, as a client, planners should be questioned as to the manner of their planning procedures, what areas are considered, and the extent of their discovery questionnaire so that a full financial plan can be implemented. A holistic financial plan provides an understanding of the client’s past financial history and provides a road map so that a person’s future goals can be envisioned and accomplished.
Mary Fox Luquette, MBA, CLU, ChFC is a finance instructor in the BI Moody III College of Business at the University of Louisiana at Lafayette.