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Do You Help Your Clients Identify Credible Financial Resources?

By Cora Pettipas, CFP, Canada

Our clients do not always find financial planning as fascinating as we do. It is unfortunate, but true. To counteract this natural client disinterest (or aversion), it is helpful to give clients resources to use to make finance fun and approachable. Thanks to the internet there are a plethora of great resources you can direct your clients to. Here are five areas of your client’s finances that need to be organized to complement your specific efforts to build their wealth, along with resources for those areas:

Cash Flow Planning Resources

Cash flow planning is the first and most important step of financial planning. What comes in has to be greater (or at least equal) to what goes out, or your client’s wealth decreases. Before any other type of planning can be done, it is essential to have a budget. Most planners resist budget making and monitoring, and feel it restricts their clients. Properly used, a budget is actually liberating for clients and will give them a sense of empowerment about their finances. It acts as a check and balance to see how well they are doing overall with their planning, especially when paired with the net worth calculation. Here are some great resources for managing cash flow for your clients:

Tax Planning Resources

Taxes are most likely your client’s biggest bill, so it is important they know about the specific deductions and credits they can claim in any given year. It is recommended that you have a referral network for clients who need the assistance of a tax specialist, especially if they have to file in multiple jurisdictions. Here are some other resources that can help you navigate your client’s tax planning:

Investment Planning Resources

When investing your client’s hard earned funds, it is important for the client to have a goal in mind for the money, so you and the client can properly determine their risk tolerance and investment timelines. Their goals may change as their lives change, so you want an investment plan that can be flexible enough to handle these deviations. Some great resources for investing include:

Retirement Planning Resources

With the changes in in our culture, retirement planning seems like a luxury to most clients, especially if they work in the private sector. However, you are not really planning for your client’s retirement, but for their financial independence. Even if they do not plan to fully retire, or are planning to ‘die in their boots,’ it is still important that they have a nest egg in case they cannot work. Retirement planning is very daunting to most clients; as increased longevity rates and the low interest rate environment have increased the projections of funds needed, easily exceeding a million dollars. However, some funding is always better than none, and savings need to be on a best efforts basis. Then, they can find creative solutions to fund the potential gap, if needed, as the date of retirement or partial retirement arrives for them. Here are some great resources for retirement planning:

Insurance & Estate Planning Resources

This is an area that is often ignored by too many clients. After any life change for your client, it is recommended that your client’s estate plan and insurance coverage be reviewed. Although having an estate plan, including a will and insurance, may not seem important to them if they are healthy, they may not be happy with the way their wealth is treated if they were to die intestate. Your client needs to proactively have these conversations with a qualified life insurance agent and their lawyer. This will help save a lot of potential heart ache later for their family.  Also, the peace of mind that everything is organized to your client’s wishes will be well worth the effort for them.

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