Holistic financial planning: Partnering with your financial advisor

holistic financial planning

Holistic financial planning: Partnering with your financial advisor

A holistic financial planning approach allows your financial planner to carefully consider and integrate all aspects of your finances and future goals instead of compartmentalising your lifestyle. Typically, you wouldn’t enter into a financial planning meeting asking your advisor how you can help them. But, financial planning is less about the numbers on a balance sheet and more about collaborating to reach your financial goals. A mutually beneficial relationship is the cornerstone to successful financial planning, so your partnership with your financial planner needs to be a holistic one.

Holistic financial planning

Regardless of your financial situation, we all have financial life goals that we aim to achieve. These goals can include buying a house, saving for your child’s future, retiring, etc. and you want your financial planner to support your vision. A holistic financial plan will encompass all of these aspects to ensure the proper management of your financial resources. This process has to include all relevant financial information to develop the best plan for you to achieve these financial life goals. It will also provide you with guidance in everyday decision making. Nonetheless, financial planners still face many challenges to holistic financial planning when partnering with the investor.

Investors who source a financial planner based on unrealistic expectations of potential financial gains, usually fall victim to unethical financial planners who promise the world but fail to deliver. A wise investor is one who manages their expectations and seeks out an ethical financial planner. Certified financial planners follow a six-step financial planning process, which enables them to tailor a unique plan for your circumstances. During these steps, there are multiple opportunities to fully disclose relevant information as well as be met with transparency from your financial advisor. If you neglect to inform your financial planner regarding certain information you may receive inappropriate advice. For example, if you omit to inform your financial advisor about your direct share portfolio, your asset allocation analysis (the allocation of your funds between bonds, property, cash and equities) may be inaccurate and you can be ill advised.

The final stage in the six steps of financial planning provides for ongoing care and therefore you should be meeting with your financial advisor at least once a year. The investor is responsible for continually disclosing all relevant financial information for example, change of employment, cashflow management, health, or marital status, as this will ensure your financial strategy is tailored to your changing personal circumstances and financial goals.

Financial goals aren’t achieved overnight and successful investors understand that financial planning is a life-long process. For instance, it has been proven time again that attempting to time the market is not an action that can be consistently done with success.  Ultimately, this presents a risk of eroding your wealth by not remaining on course with your financial strategy.

Why should you help your financial planner?

A holistic financial plan allows you to understand how a financial decision will influence other areas in your life. By approaching each financial decision as part of a broader picture, it will allow you to consider the short- and long-term effects on your life goals. It is also easier to adapt to life changes and you will feel more secure that you are on track to reaching your goals.

We advise you to engage with a trusted financial planner who has your best interests in mind. While it is important for you to provide accurate information, it is equally important for your financial planner to keep you informed. This information includes fees, investment risks, and recommended time frames, etc. and must be disclosed to help manage expectations. Visit the FPI’s website on www.fpi.co.za to select a CERTIFIED FINANCIAL PLANNER® professional.

Jason van der Westhuizen CFP® is a financial planner at Netto Invest.

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