The Measurable Benefits of Having a Financial Plan in Place

Last Updated (Tuesday, 19 August 2008)
Written by Hank Brock

You hire a planner. You pay a fee. What do you get in return? You get two very different kinds of benefits. You get psychological benefits, and you get monetary benefits.

The psychological benefits are yours. You keep them. They include things like increased peace of mind, progress toward reaching your goals, without worry about unfinished business.

What about the monetary benefits? This is how most planners must justify their existence, their employment. For now, don't even consider the long-term strategic benefits of having a plan. For now, look at just the first couple of years. The typical client will usually see a cash-an-cash measurable, identifiable return of anywhere from eight to 30 times the fee. In other words, if your fee is $1,000, you will see anywhere from $8,000 to $30,000 in identifiable returns within the first 24 months. What kinds of returns? Income tax savings. Improved returns on investments. Savings on legal fees. Savings on insurance premiums. Increased cash flow.

Can your planner guarantee that return? No, of course not! That would be most unprofessional. But a good planner can guarantee that, regardless of what you see during the first few years, you will absolutely benefit in the long term from a solid, well-thought out financial plan designed by a professional planner.

And a good planner should be busy enough with an already active clientele that he will guarantee that, if at the conclusion of the exhaustive data-gathering interview, he doesn't feel he can accomplish something for you that will be very meaningful, then he will bow out of the engagement.

No planner worth his salt wants to do busy work. You don't want to hire him to do busy work, and he doesn't want to do it. He is in his career because he loves what he does. He knows that his clientele only grows when he has satisfied clients, and they refer him to their colleagues and neighbors. To do that, he's got to have meaningful long-term client relationships, where they get ahead financially.

Only then, do all prosper. Only then, does your planner stay employed by his employer: you. Only then, do you introduce him to neighbors and colleagues.

And that is as it should be, because like all laws governing money happiness, everyone benefits from complying.

Hank Brock is president of Brock and Associates, LLC, a St. George, Utah based financial consulting firm.  To learn more about the benefits of having a financial plan, please schedule a time to meet with Brock and Associates.

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