Financial Planning: Creating a Dialogue to Help Achieve Your Goals

Whether it is retirement planning, funding future education for children or grandchildren, or the possibility of helping a family member financially down the road, most people have at least one question mark in their minds in regard to their financial goals.
We believe there can be great benefits in developing a formal financial plan. In fact, just the exercise of identifying personal goals can lead to greater peace of mind. Creating a plan for the future and a framework for measuring success that will continue to be relevant as personal circumstances evolve can increase the probability of achieving those goals. After all, if you cannot name the ambition, how will you know if you have succeeded or, more importantly, if you have drifted from the intended path? Defining an individual’s objectives, along with the perceived challenges in getting there, will flesh out the issues and will help separate the ‘wants’ from the ‘must haves’.

When we approach the financial planning process with clients, we aim to first understand the unique objectives of each individual. We then consider all aspects of her financial circumstance, including the value and asset allocation of her liquid and illiquid assets, liabilities, income and expenses. We also seek to unearth any hidden vulnerabilities present in the realms of estate planning, tax planning and insurance. Is her estate plan up to date and properly implemented? Are accounts titled correctly? If appropriate, are trusts funded? Are beneficiaries up to date? Is she properly insured and are those policies competitive with what is available in the market? Is she interested in long-term care insurance and if so, what are the most relevant considerations unique to her in that rapidly changing marketplace?

Certainly, financial planning cannot realize its full potential value if it is not married with an investment strategy appropriate for each client’s circumstance. Financial planning is not a one-time event but rather a fluid, ongoing process that combines both science and art. Without an investment strategy that parallels the goals, sensitivity to risk, and other unique considerations in any plan, even the best intentioned financial plan will quickly become stale. We are eager to craft investment strategies that will maximize the opportunity for each individual client to achieve his or her objectives. Asset allocation and diversification remain extremely important and needs to be considered across all assets in order to ensure that the resulting plan is both accurate and robust. We discuss and consider the tolerance for short term portfolio volatility – which for many investors is no doubt tested by the daily gyrations of global investment markets.

The output of this exercise highlights what is required on the path to meet goals as well as any gaps in the assumptions to get there. Dialogue around risk areas may include asset allocation as well as spending and saving. Exploring possible solutions to alleviate gaps in a plan allows for greater control, understanding and confidence.

Ultimately, financial planning can be a very meaningful tool to identify individual and unique objectives, understand the path forward to those financial goals, including what is required in order to achieve those goals, and where the risks may lie along the way. The output and corresponding dialogue equips clients and Crestwood Advisors with the information necessary to make the best choices regarding risk and lifestyle, both today and in the future, in order to provide the best opportunity to achieve the client’s goals.

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