Wealth Management Advisors: Your Financial Road Map

Your Financial Road Map®

During the Financial Road Map® Conversation, you shared with your financial advisor three important things that are essential to writing your Financial Road Map®. One was what’s important about money to you. The second was your goals that are meaningful to you and that require money and planning to achieve. The third was a review of your current financial reality.

In reviewing your financial reality, we looked at your cash reserves and all sources of debt. We inventoried your insurance programs and accounted for your growth assets. You then retained us to write your Financial Road Map®… an action plan that tells you exactly what you need to do to:

Establish and maintain an adequate cash reserve,
Reduce or eliminate your debt on a schedule that makes sense for you,
Review all your insurance programs to determine whether you actually need any insurance at this stage of your life, and if you do, to determine the right kind of insurance, and the right amount of the right kind of insurance to give you adequate protection from financial risks,
And then we promised to develop a plan for how you can allocate your growth assets so that you have the highest probability of achieving your goals.

To deliver on this promise, we activate our deliverables team so that you get the benefit of a trusted specialist in every area of your financial action plan. The first specialist that we engage is usually a CFP, CPA or Financial Advisor that has gone through our training and certified to write financial action plans that fulfill the requirements of the Values-Based Financial Planning™** methodology.

We use a financial assessment tool and a five star scoring system to determine whether there are vulnerabilities or gaps in your current financial position relative to the achievement of your goals.

The plan writing specialist then reviews the results of the assessment with your financial advisor. Together, they develop a plan for what your cash reserves should be based upon what you shared in your Financial Road Map® conversation… blended with prudent financial planning practices. And then they come up with a plan for how you can establish and maintain that cash reserve position.

They then review your debt picture and make a determination of “good debt” vs “bad debt.” Good debt usually involves leveraged investing in growth assets like real estate, and it also provides tax benefits, like your home mortgage. Bad debt is revolving debt that has built up over the years purchasing consumables or depreciating assets. They look at your cash positions after establishing your cash reserves, and your anticipated cash flow for the next few years to come up with a debt reduction or debt elimination plan that makes sense for you.

The planning team then looks at your assessment results to determine that your financial risks are adequately covered. If vulnerabilities exist (the risk of loss of income to a dependent family if sufficient assets to care for them have not yet been established; loss of needed income due to disability; loss of assets due to long term care expenses; or loss of estate value due to estate transfer taxes, for example), the planning team brings in trusted insurance specialists to determine the optimum way to cover those risks… and to compare the current coverage to other options that may be available. The specialists make recommendations to the planning team who then make a final determination and write it into your plan.

Risk management can also take into account litigation protection as well as estate legacy goals that you may have expressed as important to you during your Financial Road Map® conversation. An action item resulting from this could be a meeting with attorneys who specialize in these areas. These meetings are facilitated by your financial advisor at your financial advisor’s office. Their job is to facilitate the meeting in such a way that the legal specialists know what is important to you and are able to develop the legal strategy that is right for you.

And then, the planning team looks at your growth assets. A Portfolio Modeling Specialist is brought in to work with the team to develop an asset allocation plan that gives you the highest probability of achieving your goals based upon your IPP (Investment Personality Profile) and the resulting IPS (Investment Policy Statement).

They will select from a variety of traditional assets (stocks, bonds and mutual funds)… Alternative Investments (real estate, oil & gas, equipment leasing, private equity, managed futures, precious metals, collectibles, etc)… Structured Investments (Variable Annuities, Variable Universal Life, Indexed and Fixed Annuities)… and Money Managers (Specialists who have developed proprietary models for managing equities and fixed income)… and blend them into a total portfolio.

The portfolio modeling team creates diversification throughout your portfolio. Diversification of individual securities… diversification of asset classes… and diversification of money management styles. The goal is to give you the highest probability of achieving your goals with reduced risk. It is not our objective for your portfolio to out perform the stock market or any of the market indexes. Nor is it our objective that your portfolio has the same volatility as the stock market. Our objective is for you to have the highest probability of achieving your goals… with an acceptable risk budget as determined by your IPS.

Once all the above is brought together from the contributing specialists… your plan writer then writes it into a systematic, easy to understand, action plan and reviews it with your financial advisor who gives the final approval… and then presents the plan to you.

Attempting to do everything on the plan at one time is usually impractical, so the team develops an action plan of priorities often covering the next two years. The first year is divided into quarterly objectives. The first quarter is divided into monthly objectives. The first month is divided into weekly objectives.

Once you approve the plan, your financial advisor then shifts the team into the implementation mode. This is the most critical part of the planning process for you to achieve the goals that are important to you. Just as joining a fitness club will not make you physically fit… having a written plan will not make you financially fit.

It is ONLY the persistent implementation of your action plan that will give you the highest probability of achieving your goals. And the achievement of your goals, is the best indication that you have made smart choices about your money.