Why Holistic Financial Planning Helps Meet Clients’ Diverse Needs
Provided By: Adelae Winters, Financial Advisor
Often, you are the only person who can see your entire financial picture. However, typically a financial advisor or certified public accountant has expertise or knowledge in financial planning, tax planning, accounting, insurance and estate planning. In a traditional financial service model, you might have found that these professionals – often salespeople – recommend products based on their limited knowledge of you and your family’s needs. These experts are likely not collaborating with one another to ensure you are maximizing your financial opportunities.
So, what’s the solution? It can be time-consuming and expensive to work with multiple professionals, and it could be advantageous for you to look to a more holistic financial professional to help you in various service areas.
Holistic Financial Planning 101
What does holistic really mean? It is defined as relating to or concerned with wholes or with complete systems rather than with the analysis of, treatment of, or dissection into parts. To break it down even further, say you interview two financial advisors about your retirement needs. One advisor might use a calculator to assess your current income streams and what age you want to retire and give you a numerical assessment of how much you need to save each month or contribute to your retirement account. The other advisor asks you questions about your long-term goals and your life’s values and aims to get to know you on a deep level. The primary purpose of working with a holistic financial advisor is to create a plan and build a relationship that evolves and adjusts based on changes in your life, the economy, the tax environment and what is happening in the stock market.
A holistic financial advisor considers all aspects of your financial situation, which allows them to serve you no matter what life brings – from retirement, education, tax and estate planning to debt reduction and investment management. This approach has multiple benefits, but one of the most notable is how a holistic plan incorporates your current tax position. A holistic financial plan includes the tax implications of your investment decisions because no one should be paying more taxes than is required by law.
Holistic Planning Puts Tax Saving at Its Core
If your advisor is not a certified public accountant or actively collaborates with tax professionals, then there could potentially be missed opportunities or tax implications to your investment portfolio. In 2023, your financial advisor should be up to date on ever-changing tax laws and legislation, so you don’t have to be, or alleviate you having to be a middleman communicating information between these two professionals. It should be their standard practice to explore every option for reducing tax liabilities. Taking a holistic approach through a tax-smart lens to review your investment strategy, business assets, possible insurance needs and retirement goals – ensures your investments are appropriately allocated, considers future expenses and how they will be covered, plus the tax implications of your investment and distribution decisions, including dividends and capital gains or losses.
Investments Are Not the Answer to Every Problem
Portfolio management is a crucial part of your financial plan, but viewing investments as the answer to every problem could leave you as an investor feeling deprived of more robust financial services. You cannot invest your way into having appropriate life insurance. You cannot invest your way out of paying more taxes. And you cannot invest your way out of spending more than you make.
Your investment portfolio and tax situation typically are the most discussed areas of your financial plan, but a holistic approach means that if you make a change in your portfolio that impacts your estate plan, you will not need to call your financial advisor, they will already know.
Cordell, Neher & Company, PLLC, takes an integrated approach to financial planning by blending tax professionals and financial advisors to give you a complete financial team in your corner. For more information, visit our website at cnccpa.com or give us a call at (509) 663-1661, and we’ll begin helping you, your family or your business today.
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