Why financial planning matters for clients

David Reichert, CFP, AWMA, APMA, founder of Reichert Wealth in Murray, Utah, explains the value of financial planning this way: 

“Whether your financial goals are due next year or in 20 years, planning your financial future is one of your most important priorities. Your financial future depends largely on the decisions you make today. That’s why it’s so important to understand the benefits of financial planning and how it may help you improve your financial future.”

Mr. Reichert describes financial planning as a highly personal process that helps clients identify and prioritize the goals unique to their situation, then develop strategies to pursue them. He says his financial-planning process has six ongoing steps:

1. Collect essential information.
2. Analyze the client’s current strategy to determine whether it is positioned to work toward their financial objectives.
3. Consult on the strategies or behavioral changes that may help the client pursue those objectives.
4. Use visuals to show how a proposed strategy may help the client progress toward those goals.
5. Implement the strategy.
6. Monitor and review the plan over time.

Mr. Reichert says financial planning may help clients answer questions such as the following:

• What rate of return do they need on their investments to reach retirement goals or other financial objectives, such as college funding or a down payment?
• What financial resources would be needed if one spouse were to predecease the other?
• How can they optimize cash flow, and how might that affect other financial objectives?
• Does their mix of stocks and bonds (asset allocation) match their risk tolerance and investment-goal time horizon?
• What estate-transfer issues are they likely to face, and how can they transfer an estate or business as tax-efficiently and cost-effectively as possible?