A Financial Plan Is Merely A Tool

Some financial planners create plans for the sake of creating a pretty plan.  That seems desirable in that they are probably complete, internally consistent and up to professional standards.  Some work and some don’t.

Here is a thought from Hunter Doherty “Patch” Adams, the physician portrayed by Robin Williams in the 1998 movie of the same name.

“You treat a disease, you win, you lose. You treat a person, I guarantee you, you’ll win, no matter what the outcome.”

Financial planning is not about building financial plans.  It is about helping people satisfy their needs for security, growth and preferred lifestyle.  Treat the person not the problem.

Financial plans are a tool that allows communication and insight into complicated problems and opportunities.  Tool centric plans fail because the circumstances are never narrow enough to exactly fit.  Like the old idea that if your only tool is a hammer, every problem will appear to be a nail.

Tools help because they magnify strengths.  No one should want a tool for its own sake.

If you over-focus on a plan you will lose track of objectives, resources and progress.  “We are hopelessly lost but making good time.”

Focus on the people and their objectives.  That never fails.

Contact: don@moneyfyi.com  

Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

3 Comments on “A Financial Plan Is Merely A Tool

  1. Totally Agree. The document itself is not worth the paper it is written on. The real value of the plan is the insight that is gained from it and the motivation to do what is needed to achieve the outcome on an ongoing basis.

  2. Financial Plans are great visual teaching tools. They can magnify and emphasize a clients current strengths and weaknesses.
    Action… Implementation…Execution, these are foremost, the objective.
    Yes, that can be done without the pretty paper.
    I agree Don. Spitting out a machine of Financial Plans is not going to set clients on a path to Financial Independence.
    However, Perception is King and clients want to know that… you know.
    A Financial Plan can help them gain confidence that you have an orderly approach to guide and assist them with the journey.
    Using them as a tool…and not a crutch….is key.
    Thanks for the “food for thought” Don!

  3. Nothing new – apart from technology now allow us to create pretty pictures such as Cash Flow modelling etc. The skill of a good adviser stems from a good interview (documented in a fact find) resulting in a flexible game plan (suitability report) and regular monitoring and adjustment of progress towards a changing target.

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