Financial Planning Services
Financial plans are roadmaps that advisors create to help clients understand their income and expenses along with the amount they need to save and how to invest to meet future financial goals such as being able to retire, family educational expenses and other life goals.
All of these factors are used along with estimates for future returns on investments to determine if the financial goals of the client can be met or the changes that need to be made to make that more likely to occur.
Financial plans come in a wide variety of forms. Some are very technical while others have more qualitative data, and they may be highly complex or more simplistic. At Alden, we believe financial plans need to incorporate all of the future life goals of the client and their family and be based on realistic savings rates, investment return expectations and future spending assumptions. After a good financial plan is created it should be reviewed on at least an annual basis to determine if everything is going according to plan or if adjustments need to be made.
Financial Goals & Objectives
This section should detail all of the clients financial goals and when they are anticipated or need to be achieved. These would include major life items such as buying a home, larger home, or second home, starting an business, funding children’s or grandchildren’s educations, financial needs for the care of parents, a sick or a disabled relative, starting a business and of course the timing and income needs for the client in retirement. The retirement strategy is very important and can be a stand along part of a financial plan.
Cash Flow Analysis
An important part of the plan is an analysis of the client’s monthly cash flow. Current income, expenses, and savings are budgeted to be sure enough is being set aside to meet future goals. This will also include schedules to determine when debts will be paid off.
Client Risk Analysis
While each client is unique and has individualized risk factors several factors are common to almost all clients, including insurance for loss of life of family members, disability, property coverage, casualty coverage, catastrophic coverage, and personal liability coverage.
Net Worth Report
This report contains a list of the client’s current assets and liabilities and will be updated as both change over time.
Utilizing what is learned in the goals, cash flow and risk analysis an investment strategy and plan can be tailored to the client. This will include the specific investments to be used, both traditional (stocks, bonds, mutual funds, ETFs) and possibly non-traditional (real estate, limited partnerships, alternative funds, private company investments) and their expected rates of return. It will also include the amount needed to be invested to likely meet the client’s financial goals and incorporate any retirement plans, pensions or other tax deferred investments the clients makes or will be making.
Estate Plan & Tax Strategy
An estate plan is important to determine the taxability of the client’s estate and how that will be handled. There are a great many people that do not even have a will, which we encourage everyone to get at a minimum as far as estate planning goes. Estate planning can be very complex, especially if the client needs things like inter-vivos trusts, power of attorney, medical directives, and marital trusts. However, we can bring in experts to help in each of these areas saving innumerable aggravation and frustration down the road. Tax reduction strategies involve identifying ways to minimize taxes on a client’s income to the extent permissible. The ongoing march of technology and new regulations like the JOBS Act are providing many investors access to more deferred tax investments than were commonly available even 10 years ago and these should be evaluated by any financial plan.