I thought it may be useful to briefly summarise what a client can expect to receive as part of our financial planning service.

Executive summary

The report starts off with an executive summary that provides bullet points of the main recommendations. No detail here. Just a list that makes it easy for clients to recall information.

summary of clients current situation

Then the report provides a detailed section on the clients current situation. This includes information about the client, goals, income, expenses, net worth, asset allocation, and more. It is a useful snapshot for a few reasons:

• It provides the client concise information on their current situation so that they can see any part of their situation they aren’t that happy about or didn’t realise. For example, some clients don’t realise how much they have invested in a certain country or segment until it is neatly broken down. Others didn’t know how much equity they had in housing compared to other assets. Others didn’t realise they were invested so conservatively, and so on.

• It provides an opportunity for the client to clarify that my reading of their situation is correct.

• It provides the client a great reference point to come back to in the future, so they know exactly what position they were in when they received the advice. This is very handy to determine how much has changed and when/if advice may be needed again.
  

Next up is a section discussing the importance of managing expectations and getting the right balance between risk and returns in light of one’s goals.

running different scenarios

Now the report gets into the meaty stuff. A good 10 -15 pages is dedicated to hashing out different scenarios clients are considering. This can range from decisions around paying off the mortgage or investing. Retiring early. Taking sabbaticals. Having more children. Moving overseas. Going part time. Changing careers. And much more. Life changing decisions get wrung through different simulations to see what is possible for clients and what is a pipe dream or too risky/not recommended. This section involves graphs showing likely cashflow projections with different paths taken, as well as running commentary and my personal recommendation based on best understanding of the client and their situation. This also acts as a retirement planning exercise.

determining a clients ideal asset allocation

After that, the report goes into an ideal asset allocation for the client dependent on their goals and timeframe, and personal tolerance for risk. Investment recommendations aren’t made quite yet, but exact dollar amounts are advised, what type of asset they should be allocated to, and in what percentage. So should the clients situation change, the advice remains relevant. It is just the amounts that may change. For clients at or near retirement (close to decumulation of funds), this is the section that outlines how much to reserve and where and why. There is also plenty of information and examples provided should the client want to continue with their own management of assets in the future.

recommendations

Then we reach the recommendations section of the report. This where I offer my recommendations to the client. This typically involves:

• Investment recommendations. What funds and accounts to invest and save in, and how much in each fund and why. Alternatives are also provided should the client want more options. As an independent commission free adviser, I can look into a wide range of options for my clients and am not restricted by funds that line my pocket. ESG options are always a part of the consideration here too. Information on each company and fund recommended is provided too so that the client is fully informed on what they are investing in.

• Helping the client decide when to invest, especially if a large lump sum is involved.

• Changes to KiwiSaver fund and type, if any

• Advice on an optimal cash holding for emergencies and goals.

• Bringing attention to the client if there are any holes in their insurance or estate planning. I am not a specialist in these areas but can spot out where there is a potential need.
  

order of implementation

Finally, I provide a timeline of the recommendations. This basically provides action points for the client and summarises everything they may need to do. The report can be hefty, and it is a good overview for the client so they don’t forget anything. For example, November 2023 – Open x account and set up an automatic payment of x amount. December 2023 – Contact x company and switch your KiwiSaver provider.

I hope that was somewhat helpful to anyone who may be considering getting a financial plan done. I’m always happy to answer any questions you may have.

The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here