The essential elements of a smart financial plan

Financial planning

Feb. 21, 2021

Having a comprehensive financial plan is key to making sense of your wealth ecosystem, pursuing your long-term goals, and planning a legacy for future generations.

Why you need a comprehensive financial plan

“Typically when clients come to us, their financial picture is a little like a collection of independent pieces representing solutions to the problems they faced in the past,” says Joe Sicchitano, head of Advice and Planning at Truist Wealth. “Maybe they’ve collected a 401(k) from a previous employer, bought some insurance from a family member. Their previous banking relationship may be from when they graduated college or bought their first house. They have this collection of pieces that made sense at one point, but may not be working in harmony now.”

Through the planning process, “a financial advisor takes those building blocks and makes them into a cohesive and seamless whole, looking at all the elements to determine how they interplay, how they lend strength to one another,” Sicchitano says.

Concrete, actionable steps

When Truist advisors talk with their clients, “the goal is to uncover not just data, but also what is truly important to them, what gets them motivated,” says Kristen Beard, regional director of Advice and Planning at Truist Wealth. “This is part of the discovery process, where we may have heard the client say things like, ‘It’s very important for me to take care of my children after I’m gone.’ We want to understand a client’s nonfinancial values—we ask those foundational questions that lead to the emotional, social, and purpose-driven aspects of what the client wants to accomplish and ensure a far-reaching and lasting impact.” Understanding your core values and expectations on both a financial and nonfinancial level results in the deep strategic analysis needed to create a durable, actionable plan.

“We’re able to say not just, ‘Here are some things we think you could do,’ but instead, ‘These are the solutions that we think you uniquely should do. This is why we think this is the best route for you to take based on your stated goals,’” Beard says. “And instead of handing you a 300-page plan that you may or may not read, we’re able to boil down the financial plan to incremental action steps that you can start to take today to get closer to what matters most to you.”

“Once clients have handled the basics, the focus tends to shift outward. ‘You start thinking not only about your kids but also about philanthropic interests and how you can help make a positive impact in your community.’”

— Joe Sicchitano, head of Advice and Planning at Truist Wealth

More than just financial capital

“When we talk with our families and clients with very high net worth, we tend to hear specific types of concerns,” Sicchitano says. “They say, ‘My partner and I achieved our goals—we’ve learned so much along the way. How do we impart those lessons—that intellectual and experiential wealth—to our heirs so they don’t have to experiment their way to success like we have?’”

In addition, he says, as a family becomes more successful, it can sometimes be difficult to maintain relational harmony, “so relational wealth, social wealth—all of these things come into play.”

Sometimes you need to bring in additional solutions, such as educating the next generation and wealth administration, for the challenges of achieving, growing, and transferring wealth. “The more you succeed in the basic elements, the more these new lenses on wealth naturally start to become part of the conversation, because you’ve handled the foundation well,” he says.

Sicchitano finds that once clients have handled the basics, the focus tends to shift outward. ”You start thinking not only about your kids but also about philanthropic interests and how you can help make a positive impact in your community.”

Navigating uncertainty

“Financial planning is about focusing on your personal algorithm—the models and frameworks you use for financial decisions,” Sicchitano says. “The customization piece is consistent throughout. We ask, ‘What’s important to you?’ because that’s the governing factor.” When clients come in for a financial review, they are often overwhelmed. “You have access to more financial information at your fingertips than you could ever possibly need.” A proper financial planning process considers this abundance of information and simplifies it so you can determine how to address concerns and complexity.

A good advisor sees every family and every client as unique but also draws on their experience of having worked with many people in similar circumstances who have navigated the same challenges. “That experience enables them to offer proven yet personalized financial strategies and tools that inspire confidence and cut through the noise, providing wisdom, direction, and clarity,” Sicchitano says. “We seem to be addicted to complexity as a people, but I’d suggest what we crave is actually simplicity.

“Right now, we’re all trying to figure out what COVID-19 is going to do to us, and dealing with a lot of uncertainty. A good advisor and financial plan help focus your attention, not on the outcomes you can’t control, but on the engine of decision-making, enabling you to make good decisions that compound over time, much like investments. Then, when the next challenge arises, you can navigate it with confidence.”