The Planner's Justification

Morrow, Edwin P.
August 1997
Journal of Financial Planning;Aug1997, Vol. 10 Issue 4, p100
Academic Journal
This article discusses the potential of the services offered by financial planners. The planner will deliver several benefits, depending on the client's circumstances. These might include improved net worth growth, improved retirement cash flow, greater income if disabled, the security of funded college education plans, reduced estate settlement costs and taxes and increased income and lifestyle for survivors in the event of death. To achieve maximum credibility, the planner must arrange the numbers in a well organized and easily understood fashion. It is not necessary to use graphs or charts, although they would not be a drawback. The financial planner's software should produce all the necessary numbers. The data should be in the various reports or schedules--an experienced financial planner will have no difficulty finding it. Financial planning software should be able to show the before and after. Before represents where the client stands now and where he or she is headed if no change in direction is made. The after report incorporates all of the planner's recommendations. For example, the estate analysis report would indicate taxes and expenses under the present circumstances. The after version would indicate the results achieved by gifting, use of trusts, assignments, efforts to fix asset valuation and philanthropic transfers. Many clients have serious shortcomings in their arrangements that could wreak hardships in the event of a disability or death. Again, the after report should emphasize the benefits of properly arranged insurance, plus other cost reduction techniques. INSET: Planning cost/benefit analysis..


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