The Benefits of Comprehensive Financial Advice
When you are looking to buy a suit or a dress for a special event, you will encounter many options. You will likely whittle down your choices by asking yourself some questions. Is the event formal, semi-formal, or casual? Is there a particular theme? Are bright colors appropriate? Will the weather be a factor in your decision? And once you've purchased your suit or dress, you may have to go to a tailor to have it properly fitted. They will rework the fabric to fit your specific measurements.
This same kind of care and attention goes into delivering comprehensive financial advice. A one-size-fits-all financial strategy for everyone does not exist. People are complicated, with different circumstances, goals, aspirations, financial situations, etc. A business owner might also be a parent, an avid mountain climber, and a marathon racer. That same person might have inherited a large sum of money or have a modest nest egg and a good deal of debt.
Since everyone has a unique financial story, financial advisors must consider as much relevant financial information as possible when offering advice. For advice to be truly comprehensive, the advisor must consider many different paths their client could take to achieve a successful financial future. A comprehensive financial plan consists of not only general financial planning but may include investment planning, banking, insurance, and estate planning, depending on the advisor's expertise. The financial advisor could facilitate some of these areas, or they could recommend trusted experts.
Why is Comprehensive Financial Advice Important
Why is it important for financial advice to be comprehensive? At its core, comprehensive financial planning is about goal achievement. We all have different monetary-related goals, and a holistic financial strategy can help us obtain those goals. A comprehensive financial approach gives investors a direction—a path to follow when making decisions.
Comprehensive financial advice takes the investor's "big picture" into account. A person's big picture could include kids in college, a new home, plans to retire in Florida, or lingering credit card debt. Holistic advice aligns financial planning with a comprehensive investment strategy. As a long-time financial advisor, I believe comprehensive advice is foundational to smart investing. But how does this happen from a logistical standpoint? How do financial advisors organize the information they need to build a logical, customized plan for their clients?