If your were asked to explain Financial Planning, how would you describe it? Would you describe it as a document that shows your net worth? Possibly a report that shows you how much money you need to retire? Something that determines if you can retire on time? Maybe it's to determine if you can buy that cottage you've always wanted? In actuality, it's all of this and a whole lot more! In fact, Financial Planning, or more recently known as Wealth Management, takes on a number of important roles for the client.
In this quarter's Q&A, we hope to convey the importance of Wealth Management in your life. We liken it to a road map. If you were to go on a trip across the world, you probably wouldn't just hop in a car and start driving. There is definitely some planning involved! After all, you would at some point need to take a boat or a plane to your destination. Also, you would need to determine where you are staying? Food costs? Fuel costs? Etc. The same can be said for your financial future. Without proper Wealth Management, you are aimlessly driving your way through life (at least financially). However, with a little time and effort, your financial goals can be visualized and eventually achieved! In turn, this provides piece of mind and clarity around your financial goals.
Q - What is Wealth Management?
A - Wealth Management is a PROCESS, and not a product. In other words, it's not something that happens once and then you're done. The process is implemented throughout ones lifetime and is centered around a life goals financial roadmap (financial plan). This is a working document where all your financial goals and aspirations are analyzed, and where necessary, recommendations are made to ensure that the goals can be achieved. The document is reviewed and modified as the client goes through various phases in life.
Q - What topics are included in Wealth Management advice?
A -Goal setting, budgets, investment planning, family protection, income planning, retirement projections, debt management, tax and estate planning, business succession and charitable decision making.
Q -What does a financial plan look like?
A - There are various levels of financial planning, depending on the complexity of your situation. However, most plans are 5-15 pages in length. More complex situations with multiple companies and/or real estate will be longer in length. They typically include, or may include, a letter on engagement, a list of goals identified, a net worth statement, a budget, an assessment of each goal, recommendations to achieved these goals, a financial projection based on a retirement date, alternative strategies, and insurance needs analysis, and an appendix with information supporting our recommendations.
Q - Who can help you with the planning?
A - We can! Our teams holistic approach includes all aspects of Wealth Management.
Q - How often do you need to update the financial plan?
A - This is dependent on your situation. On average, a financial plan is reviewed on a bi-annual basis. However, as you are approaching your target goal dates, the plan is reviewed on a more frequent basis.
Q - How much time does it take to create a financial plan?
A - This is once again determined by the complexity of your situation. One of the biggest deterrents in using Wealth Management services, is the perceived time it takes at the onset of the planning. In reality, answering a simple series of questions (as little as 30 minutes) allows for the process to be started. This is the key! If you start the planning, you've now provided the conduit for your Wealth Management Advisor to focus on the priorities in your life. Having said this, the more information you provide, the more accurate your analysis will be!
Q - What are the actual costs for the service?
A - Most costs are covered within our service offer. The only time additional costs are incurred by the client, are when specialized services are needed (Lawyers, Tax Specialists, etc.).
Q - How do you know if you are in need of Wealth Management Advice?
A - If any of the above topics are important to you, then you are a candidate!
Q - What do you need from me to get started?
A - We will provide you with a Wealth Portrait Questionnaire. Once you fill in the questions that are relevant to your situation, you can return it to us to get started on your plan!
If you have read through this Q&A, and still wonder why all of this would be necessary, then maybe consider this - Do you want to worry less about your money? Do you want to have the security in knowing that your family will be taken care of if something were to happen to you? Do you want to be prepared during unemployment, injury, or financial emergency? If not for preventative measures during difficult times, then why not simply because you want to know if you can retie when YOU want to retire? If you, or anyone you know, are looking to take the first step in managing your wealth, please give us a call!
National Bank Financial is an indirect wholly-owned subsidiary of National Bank of Canada. The National Bank of Canada is a public company listed on the Toronto Stock Exchange (NA: TSX).