What Comprehensive Financial Planning SHOULD Look Like

All financial plans are different. But when it comes to comprehensive financial planning, we believe that there are 7 things that should be included:

  • Asset allocation, investment recommendations and portfolio management
  • Retirement planning
  • College funding for children or grandchildren
  • Risk management and insurances
  • Cash flow and taxes
  • Estate planning
  • Stock options, executive compensation, etc.

True comprehensive financial planning should be tailored to each individual client. 

For Financial Freedom, that includes:

1. Ongoing Monitoring and Fine-Turning on Your Portfolio 

A $2 million portfolio involves substantial responsibility, oversight and compliance requirements. I believe it’s critical that someone actively manages an account like this and monitors the client’s investments, strategy, risk tolerances, comfort level, etc. on an ongoing basis.

This should include looking at each investment on a regular basis to confirm that it continues to meet the objectives that we have established and continues to fit the portfolio that we have developed. Additionally, it is also important to include a significant amount of ongoing research and analysis regarding the economy, world events, specific investments, etc.


Are you getting the attention you deserve from your financial advisor? Contact Financial Freedom to see how we take care of our clients and what we can do for you.


2. Formal Updates to Your Overall Asset Allocation 

Given the size of a portfolio, we formally update/rebalance our clients’ overall asset allocation on a semi-annual basis at a minimum; sometimes more often. This will ensure that it continues to be consistent with the goals and objectives, risk tolerances and comfort level of our clients.

3. Regular Updates to Retirement Capital Projections and Modeling 

Given the number of variables that currently exist in any given retirement projection combined with the importance of a client’s asset base in generating their annual retirement income requirements, I believe it’s important to regularly update your retirement model for changes in assumptions, updated account balances and updated investment performance. At Financial Freedom, this is done at least annually. Given the average life expectancy, we believe it makes a lot of sense to update a plan on a regular basis.

4. Focus on Monthly and Annual Cash Flow – An Income Source Strategy

It is important to continually develop and implement a requirement income distribution strategy that includes how best to generate a client’s desired income between now and the age of 59-½. Additionally, as clients decide to either begin taking funds from tax-deferred accounts or try to maximize their taxable assets, we ensure that these monthly transfers are occurring, and that adequate and not extra cash exists to fund each month’s transfer.

5. Regular Updates 

Financial Freedom continues to provide ongoing updates and recommendations for each of the key areas and strategies in a comprehensive financial plan as things change (risk and insurances; cash flow and taxes; stock options; retirement planning; estate planning; etc.).

For example, a client may like to consider paying off his or her mortgage, or retirement planning laws may have changed. Other clients may like to look at traveling more or purchasing a motor home, etc.

6. Regular Review of Stock Options and Executive Compensation 

Given the potential future value of certain stock options and other executive compensation, I believe it’s important that someone reviews a person’s stock options and executive compensation on a regular basis. This includes the appropriate time to exercise additional options and how exercising those options will affect an investor’s overall asset allocation, portfolio diversification and investment of the exercised proceeds.

7. Tax Review and Tax Minimization  

There are two primary tax minimization strategies that we at Financial Freedom regularly research and analyze, so we can make a recommendation as appropriate.

The first relates to the strategy of minimizing income taxes and includes:

  1. Investment of assets in the most tax-efficient manner (do we use taxable accounts or tax-deferred accounts, and do we use stocks, mutual funds or index funds and why)
  2. Consideration for tax-loss selling during the last quarter of each calendar year
  3. Consideration for income and deduction smoothing (where possible) between years when it will lower overall taxes paid
  4. The use of IRAs, HSAs and other tax-advantaged strategies to minimize income taxes
  5. When IRA and other tax-deferred accounts are concerned, the income distribution strategies we be utilizing in order to minimize total income taxes paid

The second involved federal estate taxes. We will continue to be cognizant of ongoing changes in the federal estate tax rules and regulations, and will suggest updating current estate plans and strategies as appropriate.

In addition to tax-minimization strategies, we also track and work with clients to ensure that any IRA required minimum distributions are occurring each calendar year starting after age 70-½.

8. Client Meetings and Ongoing Communications 

Regular ongoing communication is critical. We personally strive to provide whatever the right type (face-to-face meetings, phone calls, emails) and amount of communication that each client desires.

9. Coordination with Other Professional Resources 

Coordinating with other professional resources can ensure that an investor’s overall financial plan is well-coordinated and fully implemented.

This includes ongoing discussions and meetings with CPAs, insurance professionals, estate planning attorneys and others regarding your financial situation and what opportunities and updates are appropriate.

10. Special Communications 

What are interest rates doing and does that affect our fixed-income strategy? How does any legislation affect our clients? Do we need to refinance? How does a company’s announcement affect us?

Any questions that come up by an investor should be answered.

11. ‘Pick-Up-The-Phone’ Time 

At Financial Freedom, we’re available almost 24/7.

Clients always have questions, like:

  • What should I do with this excess cash I just received?
  • What’s the best way to buy a new car?
  • I want to buy a piece of investment rental property?

A good financial advisor should be able to answer any question that has anything to do with your money or finances. This area may also include financial planning work performed for other family members.

Beware: Many of our competitors provide only investment management versus a more comprehensive financial planning approach of providing both investment management and financial planning services. We believe that it’s critically important that investors need both investment management and financial planning to be successful.


New call-to-action

Filed Under: Comprehensive Financial Planning