From the October 2009 issue of Investment Advisor • Subscribe!

Beyond the Plan

Sidebar to Mike Patton's article "One True Thing"

I spend considerable time and effort in constructing a comprehensive financial plan, but it isn't meant to be a static document that only collects dust on a shelf. Here's how I use the full plan as a basis for ongoing client service and business building:

Revise the Plan Annually. When I update a client's financial plan, a historical summary is included. This summary illustrates how the client's situation has changed with every plan revision and contains numeric as well as graphical output. Some of the items included in the summary are: total assets, total debt, net worth, taxable financial assets, tax-deferred assets for husband and wife, total financial assets, probability of running out of money, debt ratios, and more. Clients love this report because it's clear and concise.

Assess Subsequent Fees as Appropriate. Financial planning can involve a great deal of time, especially in the early stages of plan development. After the initial plan has been presented and the fee is paid, capturing subsequent revenue is often limited to plan revisions. Generating an ongoing income stream is completely acceptable if the client receives commensurate value. Moreover, you need to clearly communicate this value to the client and get their buy-in.

Document Locator. This is an inventory for the client with information on the location plus contact information for all of their important documents. This is updated annually.

Funeral Directive. It contains information such as the name of the funeral home, who will preside, songs to play at the service, and so forth. In short, it includes information which will provide assistance upon the client's death to have their needs met and their surviving family members' burden lightened.

Client Vault. This is the most recent addition to my stable of financial plan add-ons. In essence, it is a central repository of every important document to the client and is held in a secure portal of my Web site. Either the client or I can scan, upload, and retrieve documents as long as an Internet connection is available. For example, if the clients were at their attorney's office, and the attorney asked to see a copy of their income tax return, they could easily find it in the vault.

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