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What Is Comprehensive Financial Planning?

By C. Mitchell
Updated May 17, 2024
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Comprehensive financial planning is the practice of coordinating all of an individual or family’s financial goals — both saving and spending — and creating from this information a long-term strategy to reach those goals. Financial consultants draft comprehensive financial plans in most cases, but savvy individuals can also draw them up for themselves. The important thing about a comprehensive plan is that is touches on every financial area. This includes taxes, insurance, retirement, investments, and any special savings needs, such as college or health expenses.

The difference between comprehensive financial planning and ordinary financial planning is usually breadth. A straight financial plan is usually designed to accomplish a certain goal, like structuring an estate plan or managing debt. Comprehensive planning includes these elements, but in a wider frame. The goal of comprehensive financial planning is to provide an overall view of financial needs over time.

In most cases, comprehensive financial planning is designed to be on-going. Finances change with changing life circumstances. A good comprehensive plan will be plastic enough to adjust to changing needs over time, without losing its integrity or effectiveness.

The first thing that a financial planner will normally do when drafting a comprehensive plan is to meet with clients and gain an understanding of their assets, their goals, and the contours of their current financial situation. An initial meeting can often take a few hours. The planner will want to get a sense of who the clients are, where they struggle, and how to get them where they need to be.

Armed with the clients’ specific information, the planner will get to work composing the plan. Most of the time, this begins with a concise summary of the clients’ current situation before comprehensive financial planning. Next comes a statement of where the clients want to be, followed by pointed recommendations.

The nature of comprehensive financial planning is such that almost anything can come within its purview. Tax planning, retirement planning, and college funding schemes are staples of most plans. More complicated plans could include strategies for debt management and reduction; structuring trusts, wills, and other estate planning vehicles; and investment funding and dividends planning.

Planners can sometimes help clients actually implement comprehensive financial plans, but not always. The main goal of planning is to draw a map to a certain financial outcome. Following that map is usually up to the client. Depending on the local laws, planners cannot always take financial action on behalf of clients. In most places, legal documents like wills and trusts can only be handled and processed by licensed attorneys.

Nevertheless, planners usually maintain the ability to monitor accounts and will often keep in regular contact with clients over time. As needs change, or as the market shifts, planners can make adjustments to the plan. In most cases, comprehensive financial planning is not just a one-time thing: it is a lifetime commitment to managed, balanced finances.

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