There are two types of financial online planning software – goal-based planning and cash flow planning. When working with your clients, it is best to choose the goal-based approach since it is meant to decrease the complexity of financial planning. Goal-based planning focuses on smaller and more numbered goals that can then be used to determine your client’s overall wealth. The performance approach, on the other hand, makes it difficult to determine the scale of their success regarding their goals. However, what exactly is goal-based planning and how does it function in your practice?

The Purpose of Goal-Based Planning

Goal-based planning sets goals that your clients wish to accomplish. As the financial advisor, your role is to determine whether these goals are reachable. To determine if they are, you construct a viable plan that reaches these goals. You consider different factors such as finances, life events, age, and health. Your role as a financial advisor is also to determine what types of goals your clients want to achieve. Are these goals essential like retirement planning, are they important like establishing emergency funds, or aspirational like traveling to Paris? These are initial factors that you establish in goal-based planning solution.

Added Benefits to Goal-Based Planning

As a financial advisor, you have a very active role in your interactions with your clients. For example, if your client states they had a salary increase, you would work with these individuals to increase the current savings rate. If your projections determine that their goals will not be attainable in the established time period, you would work with the clients to make adjustments to their financial plan. This could mean putting those goals on hold or selling assets to make their wishes attainable. The point here is that it is up to you to make your clients aware of these changes.

However, it is important to remember that while this may seem like a difficult task, it benefits your practice and your clients. Goal-based planning makes it easier to determine your client’s financial wealth in simpler terms.

Genivity is here to help. We place emphasis on helping advisors with goal-based financial planning that incorporates health wealth factors to provide personalized reporting. Using this report can help determine the importance of health in your clients financial planning. Similar to retirement planning, emergency fund planning, and debt repayment, health wealth factors are also factors to consider when establishing financial goals. Genivity puts these factors on display for your clients to consider while establishing their financial goals.