Financial Plan

Your Comprehensive Financial Plan

Why Is A Financial Plan Important?

We constantly face change in the economy that creates confusion in our financial lives. Not long ago, a good pension and/or Social Security guaranteed a secure retirement. Today, however, there are no promises, no guarantees. Inflation, constantly changing tax laws, increasing volatility of investments, job changes, and other factors beyond our control can cause havoc with short- and long-term financial plans and budgets.

“How am I going to pay for my children’s college educations?”

“Will I have enough money to retire and assure my financial security?”

“Where will I get the money to achieve all my goals?”

These growing concerns are prompting more people to seek the help of a financial planner who can create a comprehensive financial management plan.

What Is A Financial Plan?

Your financial plan is the strategy used in achieving your goals and objectives. A comprehensive financial plan should address all pertinent areas relating to your situation. Those areas that the planner does not personally address in the development of the plan should be coordinated by the planner.

You may want your financial plan to cover only a specific area such as estate planning or investment planning. While a plan for such a goal or objective may be excellent or appropriate in the areas covered, you should be aware that it is not acomprehensive financial plan.

What Does A Comprehensive Financial Plan Contain?

Your financial plan document should contain not only the plan strategies but also all pertinent data relating to the development of the plan.

While order and style of presentation may vary, the comprehensive financial plan document should include at least the 13 essential elements described below. This does not necessarily mean your plan will be lengthy, as each area should be addressed so that it suits your personal situation.

1. Personal data, including relevant personal and family data for those covered under the plan.

2. Your goals and objectives, including their priority and desired time frame for achievement, where applicable.

3. Identification of issues and problems, including education costs, taxes, major illnesses, and other factors that are or may develop into a problem. These areas may be identified by you, your financial planner, or other advisors.

4. Assumptions used in plan preparation, such as inflation, investment growth, mortality rates, and all other material assumptions, should be clarified and confirmed.

5. Balance sheet/net worth. An analysis that includes, but is not limited to, a schedule listing assets and liabilities with a calculation of net worth and itemized schedules of liabilities and assets to be included, as appropriate.

6. Cash flow management. Statements and analysis to include, but not be limited to, a statement of your sources and uses of funds for all relevant years, indicating net cash flow as well as a separate income statement, where appropriate.

7. Income tax. A statement and analysis to include, but not be limited to, the income taxes for all relevant years covered in the plan. Projections should show the nature of the income and deductions to permit calculation of your tax liability. The analysis should identify the marginal tax rate for each year and any special situations such as alternative minimum tax, passive loss limitation, etc., that affect your tax liability.


8. Risk management. An analysis of your financial exposure relative to mortality, morbidity, liability, and property, including your business if appropriate. This section should list and analyze current risks and insurance policies, including life, disability, medical, property/casualty, liability, and business.

9. Investments. A listing of your current investment portfolio and an analysis or discussion of its liquidity, diversification, and investment risk exposure. In addition, the suitability of the investments in relationship to your goals should be addressed, including risk tolerance, risk management of investments, suitability, liquidity, diversification and personal management efforts.

10. Special needs such as retirement planning or education planning. An analysis of the capital needed at some future time to provide for your specific needs. The analysis should include a projection of resources expected to be available to meet these needs at that time.

11. Estate planning to identify assets to be included in your estate, and an analysis of the control, disposition, and taxation of those assets.

12. Recommendations in writing to specifically address your goals and objectives, all issues and problems identified in the plan, and actions necessary to compensate for any shortfalls.

13. Implementation schedule to prioritize a list of actions required to implement the recommendations, indicating responsible parties, action required, and timing.


If any area of the financial plan is not within the range of the financial planner’s expertise, the planner has the responsibility to coordinate with other professionals and document this in the financial plan report. Documentation of such areas can include the professional’s name and when the review will be completed.

The analysis which is called for in all the elements of the plan should consist of a review of pertinent facts, a consideration of the advantage(s) and/or disadvantage(s) of the current situation and a determination of what, if any, further action is required. The plan should include a summary statement providing the planner’s comments on the analysis and recommendations, where appropriate, for each element of the plan.

What Is A Comprehensive Financial Review?

To complete a comprehensive review and revision of your financial plan, the planner will review and analyze the data pertinent to your changing situation. The planner then will review the strategies to accommodate your current goals and objectives. A written document should be prepared for you that complies with the 13 plan elements. Those schedules which have not changed since the previous plan don’t need to be duplicated; a simple statement that there has been no change will suffice.

Let us help create a comprehensive financial plan for you