Even though most individuals well-versed on financial investments have the “what if’s” planned out, you never know exactly what could happen. Investments and financial stability can change at the drop of a hat and consumers should be prepared for all types of situations that life throws at them. While clients may have some knowledge, a lot of them only look at the big picture, which is retirement. They walk into your offices and have the mental image of filling up the pages in their passport, and the serene vistas from their beach houses.
Although retirement is a large focus when it comes to planning your client’s finances for the future, there are also several events throughout their lives that are both expected and unexpected. These deeper conversations of discussing the “what if’s” can at times be challenging, especially when it comes to discussing planning for the possibility of costly health issues, and even the loss of family members. As a financial advisor, it is vital that these conversations are had in order to provide a robust financial plan to last them the rest of their lives.
Here are a five of the “what it’s” that financial advisors need to cover in order to provide their clients with the most powerful plan:
1. Wedding Bells Ring, Your Credit Card Sings
Most parents of daughters approaching their 20s have the thought in the back of their mind that their little princess will find her Prince Charming. Parents will be throwing out money left and right to make sure their little darling’s wedding is one for the books. Or, let’s say, love finds you later in life and you decide to pay for a wedding for yourself.
No matter the circumstance, planning a wedding is a very costly life event. According to The Knot, the national average for wedding costs hit $35,329 in 2016. So long, mid-life crisis vintage Porsche, hello Swarovski crystal everything. While this may cause your client to take out a personal loan, or dig into their retirement, this is an event that should be accounted for.
2. What You Don’t Expect When Your’re Expecting
Building a family is in the life plan of most individuals. After getting through the wedding, maybe buying a house, and establishing some savings, the time comes to bring a little bundle of joy into the world. For some women, conceiving is not a problem and everything happens with few complications. For others, trying to achieve their dream of becoming a mother takes a little bit of science, and science means money.
This also doesn’t take into consideration families wanting to adopt, or if the mother plans to stay at home and not have a second income for extra financial support. Whatever the situation, financial advisors need to have these in-depth conversations to account for the couple’s plan for child-bearing.
Even if the mother does plan to work, her projected income will decrease and medical bills will increase. All of these financial factors and hypotheticals need to be planned out.