The Anatomy of a Comprehensive Financial Planner

Do you know how to find a financial advisor that's right for your needs? Do you know what your needs include?

Whether you are starting a financial plan for yourself or you're looking for a financial planner to work with, the first step is to start with the end in mind. Describe the life you want to live in vivid detail. Write in the present affirmative and don’t hold back or permit any obstacles to block your vision. Many people don’t give themselves permission to dream and explore what they want for their future. Before you even think of gathering your financial data and analyzing your cash flow or balance sheet, you need to be able to articulate your goals. A financial planner can help in this area by facilitating a process of discovery.

If you hire a financial planner to work with you, he or she should start the engagement with a clear explanation of the services offered and a full disclosure of the fees or commissions you may pay. Financial planning services should be comprehensive and they should start with a discovery process to fully explore and develop your aspirations and goals. If you don’t feel excited about the process or the picture of your future you have described, you have not fully explored the discovery process. Go back and give consideration to what may be missing. Did you hold back because you were already thinking of the obstacles to achieving your goals? If so, stop thinking of the obstacles and focus on the desired outcome. Don’t be surprised if most of the life you describe doesn’t involve much in the way of money.

Typically, a financial life plan is centered on two elements of your financial life: time and money. In your financial life plan time=money. 

When you have completed your vision for the future and articulated the goals necessary to achieve your vision, you can then consider the obstacles that may prevent you from realizing your vision. At that time, you will consider your resources and financial statements and financial calculations necessary to reach your goals. You should also review all of the other financial planning subjects and develop policies for your decisions, including investment policy decisions, spending policies, saving policies, insurance coverage policies, and estate transfer policies to name a few. These policies form the financial plan.

A comprehensive financial plan that incorporates your life’s aspirations and goals is your best hope to realize the life you are called to live. You may be asking, what is a financial plan, and how do I know when I have one? The second question you may ask is, can I do a financial plan myself, or should I hire someone?

A search of the Internet doesn’t provide much clarity as to what is a financial plan or even what is a Financial Planner. It is generally accepted that a CERTIFIED FINANCIAL PLANNER™ (CFP®) practitioner is more qualified to provide financial planning services. CFP’s are regulated by their Board of Standards, who owns the trademark for the certification. In general, the Securities and Exchange Commission (SEC) regulates anyone calling themselves a financial planner. The SEC public web site states:

Money managers, investment consultants, and financial planners are regulated in the United States as “investment advisers” under the U.S. Investment Advisers Act of 1940 (“Advisers Act” or “Act”) or similar state statutes.

The SEC goes on to define a Financial Planner as:

A financial planner typically prepares financial plans for his or her clients. The kinds of services financial planners offer can vary widely. Some financial planners assess every aspect of your financial life—including saving, investments, insurance, taxes, retirement, and estate planning—and help you develop a detailed strategy or financial plan for meeting all your financial goals. Other professionals call themselves financial planners, but they may only be able to recommend that you invest in a narrow range of products and sometimes products that aren't securities.

So it appears as though anyone can call themself a Financial Planner but there is no clear definition of a financial plan or what a financial planner does. It runs a wide spectrum.


When it comes to defining the Financial Planning Profession, the financial services industry and the numerous organizations and associations who issue designations and serve their members have a financial incentive to remain ambiguous. As evidenced by the growth of Google searches for “financial planner” and “certified financial planner”, the public is more aware of financial planning services than ever before. These institutions have leveraged the public awareness to present themselves as financial planners in the media, instead of registered representatives, insurance brokers, or tax preparers. Financial planning has cache and helps sell products for institutional, financial services providers. The financial planning organizations and associations who serve the industry are primarily interested in growing their membership, hence, the conflict of interest.

Wikipedia defines a financial plan as:
…a comprehensive evaluation of someone's current and future financial state by using currently known variables to predict future cash flows, asset values and withdrawal plans.

Wikipedia defines a Financial Planner as:
…a professional who prepares financial plans for people. These financial plans often cover cash flow management, retirement planning, investment planning, financial risk management, insurance planning, tax planning, estate planning and business succession planning (for business owners).

The preceding Wikipedia definitions are good, simple definitions of the quantitative side of financial planning. The quantitative side of financial planning addresses your financial resources, including your assets and liabilities, your employee benefits, your income and expenses, your insurance policies, and your estate documents. Central to both Wikipedia definitions is the comprehensive scope of a financial plan and financial planner. A comprehensive approach is the first sign that someone is involved in a real financial planning engagement. A financial plan should be comprehensive and cover all aspects of your financial life. If you were sick, would you be well served to visit a doctor to be told that he or she treats only bacterial infection and not viral illness? 

There is another side to financial planning – the qualitative or life side of financial planning. The qualitative side of financial planning addresses your life aspirations, your desires, and your goals – your vision for your future. The qualitative side of your financial plan is the foundation or touchstone for your financial plan.

A key requirement of any financial planning engagement is objectivity. Objectivity is the state or quality of being true even outside of a subject's individual biases, interpretations, feelings, and imaginings. A lack of objectivity is why most individuals are not able to successfully develop and manage a financial plan for themselves. It takes practice for professional financial planners to be objective and avoid subjective biases and feelings from influencing their advice. It is very difficult, if not impossible, for many people to be that objective with themselves.

Many prospective clients come to our office and tell us their current advisor had done a financial plan at the beginning of the relationship but never reviewed it again. When asked to describe the financial plan, they typically describe a very lengthy document with boilerplate language that was produced after filling out a questionnaire. The financial plan was meaningless to them and likely only served the purpose of luring the client into a false sense of security and trust for the advisor. A financial plan should be unique to each individual and create a sense of excitement about what the future will hold. Additionally, that financial plan should be reviewed at least annually to track progress and ensure your plan has not changed.

If someone tells you they are a financial planner or they provide financial plans, ask what their discovery process is for facilitating your vision and how they will develop your financial plan to realize that vision. Then ask what scope of work will they provide? Will it be comprehensive? Will they be a fiduciary: will they put your interests ahead of their own? Will they monitor your progress? Ask what it will cost? Get all of it in writing, and hold your financial planner to their word.