Lifestyle planning is aware of the need for every client to have solid financial plans supported by custom solutions that are flexible enough to be modified according to what happens.
Financial planning as a profession has shifted and developed in the last decade, and one of the biggest emerging trends is the concept of living-style financial planning. Reversing the traditional wisdom in the opposite direction, lifestyle planning offers an entirely new approach to financial planning for individuals that goes beyond the conventional perspective of wealth and focuses on something more personal aspirational, aspirational and based on values.
Although previous advice was usually focused on product lifestyle, planning puts the client at the forefront of the planning process to know in detail the goals of the client’s life, whether financially or otherwise. Discussions about financial products or solutions will not make up one of the primary aspects of the engagement process. This is because the client-advisor engagement procedure looks beyond the client’s perceived financial needs, allowing for more in-depth discussions about the emotional and economic aspects of families, values, and individual goals. The intention of these conversations is for the planner to gain the most intimate knowledge of the client’s plans for their future and how properly-structured financial advice can aid them in achieving it. Get there.
The standard approach to offering advice most often was to seek the best investment returns for the client, and the client was then to cut their clothes according to the plan and hope that they wouldn’t run out of cash. This reductive approach to planning was backed by a single-dimensional perception of wealth, income and wealth. In contrast, one of the goals of financial planning is to assist the client in creating a picture of their ideal life for themselves and then create an investment plan that will be realistically designed to help them attain this lifestyle. Therefore, although investment returns are an essential element when it comes to making investments for the future, however, they’re not the primary factor to consider.
Understanding the emotional attachment of a customer to money, their propensity to the risk of investing, their mental biases, and worries about the future are some of the factors that are considered in the creation of a lifestyle financial strategy to ensure that the risk of investing is in line to the individual’s willingness for bet as well as the potential returns required to meet their objectives which are the so-called eat well and sleep thoroughly’ test.
While conventional advice was mainly concerned with quantity (net worth), Lifestyle planning puts more importance on quality, which includes well-being as well as physical and mental health, and financial security.
The traditional approach was focused on a particular needs in the portfolio of a client, typically as an item sold on commission – lifestyle planning offers a holistic look at the portfolio to find gaps and areas with risk exposure which is followed by a series of recommendations that will ensure that each aspect of the portfolio of the client is focused on achieving the goals they have set for themselves.
Traditional advice based on the sales of products usually results in clients being left with various products accumulated over time and not fitting their changing personal needs. However, lifestyle planners aim to provide information, with any recommended solutions or financial products, the result of this advice rather than its main reason. Furthermore, since the customer has to pay a fee to receive the guidance, they don’t need to take action on the recommended solution. They can choose to have an additional advisor implement the solution in their place.
The path to a career on the traditional financial plan assumes a course consisting of work saving to invest, retire and spending. Realizing that life isn’t necessarily linear, a lifestyle planner recognizes the necessity for every customer to establish a solid financial plan backed by custom solutions that can be easily adapted to the changing needs of life. The role of the lifestyle planner is to develop bespoke solutions that are wholly aligned with the client’s goals instead of selling one-size-fits-all solutions. These typically regrettable purchases are a context of manufactured fear. Lifestyle planners often employ scenario planning and financial modelling to determine areas of risk in a client’s portfolio, and this analysis forms the basis of recommendations and advice.
In exchange for a professional fee, and advice on financial matters from an independent expert, Lifestyle planners are compensated to ensure the achievement of their clients; consequently, creating a reliable long-term relationship between a client and advisor is essential. A key element in all client’s financial choices, a lifestyle planner is crucial in providing clients with unbiased and strategic guidelines throughout their lives and beyond. This job requires a thorough understanding of a person’s relationships, the future legacy they would like to leave in their families and their goals for transferring their wealth. In this sense, Generational wealth planning is a critical element of lifestyle planning, ensuring that the future’s wealth is not just created but is also distributed and protected as part of a bigger plan to leave the foundation for future financial generations.
If you’re looking to meet with a financial advisor who specializes in lifestyle planning, prepare yourself to answer a variety of detailed questions that could include the following:
- What is it that keeps you up at night?
- What are your most significant worries about finance and money?
- What were your first memories of cash? What feelings do you experience when you think of the memory?
- What do you think about the issue of debt?
- If money were not an issue, What would be your ideal job?
- How will your costs change as time passes?
- What are some things that you do that leave you feeling pleased?
- Do you feel that you’re in control of your financial situation? If not, which areas of your financial situation would your financial advisors consider the most critical areas that need to be addressed?
- What do you envision your retirement as looking like? If you answer this question, pay particular attention to where you would prefer to reside, what you’d like to take part in, and what a fulfilling retirement could look like.
- If you had only five years left, What would you like to accomplish in your life?
- What is the most outrageous idea you’ve got to accomplish in your life?
- Which charities, churches, or organizations do you enjoy helping?
- What is the right amount?
- What would financial freedom look like for you?
- Beyond leaving a financial legacy behind, what do you want your name to remain in the memory of others?
When you work with a personal financial advisor, Any recommended solution is likely to be custom instead of turn-key, custom-designed to meet your unique needs and adapted to your personal goals. For this Financial Planning Week, make the process of planning your finances and life goals an absolute priority.