As I interview most, actually all, of our clients and prospective clients, I am amazed that their current financial advisors do not provide them with a financial plan. It does not make sense that advisors do not do at least a College Cash-Flow Analysis. Maybe it’s because they don’t know where to start, how to calculate the cost of college, how to incorporate risk management into their investment recommendations, what effect taxes will have on a college cash-flow plan, or how the plan will affect your retirement plans.
Do they actually know where a client’s SAFE money should fit into the client’s overall portfolio? Are the current advisors schooled or educated in proper risk management? Is the plan prepared for an extended flat or down market? Is the portfolio all in mutual funds, individual stocks and bonds?
It is also hard to figure out WHY the client doesn’t demand a College Cash-Flow Plan, identifying how much college will cost, how paying for college will affect our family financial plan, and how it will affect our retirement plans. What will happen to my financial plan in a protracted, flat, or down market? Have we made plans for an extended disability of the breadwinner or winners, and what happens in the event of an untimely death? Are we secure with adequate savings in case one or both breadwinners lose their jobs? Are we overcommitting to retirement plans and not putting enough into our emergency funds?
One vastly underrated consideration is, “What will my tax bracket be in retirement? Do I really want to cut back in my retirement years?” After all, what successful client is in a lower tax bracket in retirement?
For most of you, if you read this blog, you will not demand the resolutions to your family’s college cash-flow, financial and retirement plans that a family head should. Don’t wimp out; we can help you put together a real sustainable, operational, family financial plan.
What are you waiting for?
More family financial considerations to follow. Keep an open mind.
Mike Giffin, President
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