To get to your financial goals and wealth objectives, you need a customized road map.
To develop a route to your destination, you likely need to work with a financial professional who will sit in the passenger seat. And the more information you can provide your advisor, the better they can help navigate your route.
“Depending on the client situation,” said Truist Wealth’s Kristin Beard, “we might need to get very detailed, or we can stay a little more high level. “As we dig into the planning process with the client, that level of detail starts to unfold. But it’s a partnership.” The senior vice president and regional director of advice and planning discussed the elements of a financial plan on Episode 6: Create—and nurture—your financial plan of Truist Wealth’s podcast, I’ve Been Meaning To Do That.
The information you provide your financial professional helps them analyze your current situation and what you want to accomplish. The following is some of what you should expect to share with an advisor in developing a financial plan.
What your advisor needs to know
Who you are, and the people you care for. Beyond discussing your goals, values, and aspirations, your advisor wants to know who else to consider as you discuss what you want to accomplish.
Assets. What you own, including what’s in your investment accounts and other types of accounts that you have for saving for the future, along with your other personal assets (such as an art collection, jewelry, and so on).
Debts/liabilities. Mortgages, student loans, credit card debt, car loans, and other loans outstanding. Provide a record of the loan terms and interest being charged.
Income and expenses. All your income streams, such as salary, bonuses, fixed-income, pensions, Social Security benefits, and so on, as well as a detailed list of monthly expenses and other spending.
Risk factors. “Part of financial planning is also planning for the unknown and for what may happen,” said Oscarlyn Elder, host of I’ve Been Meaning To Do That. The topics might include whether you have life insurance, other insurance policies you have for yourself or your assets, and long-term care and other health care costs in retirement.
Actions you’re taking today. Your regular contributions to a 401(k) and other retirement accounts, estate plan documents, and so on.
Map out the future—with potential detours
You and your financial professional will use this information to develop a financial plan. “We figure out where someone is by understanding those finances and then where they’re trying to go,” said Craig Cascio, head of wealth planning at Truist Wealth. If there’s a gap between your current finances and what you’ll need to meet your goals, the advisor will talk to you about options for funding that gap.
But the road map you’ve developed doesn’t end there. Your advisor used certain assumptions when working with you on a financial plan, including life expectancies, inflation rates, and potential returns for investments. If something unexpected happens along the way—anything from an extended illness to a child winning a scholarship—you might need to revisit your assumptions.
Sometimes your plan maps out perfectly and sometimes you need to make adjustments along the way. As Cascio said, “Planning is a continuing conversation.”
Listen to Episode 6: Create—and nurture—your financial plan of Truist Wealth’s podcast, I’ve Been Meaning To Do That.