Putting Holistic Financial Planning into Practice

Heather Zack, JD, LLM, MSFP, CAP
Heather Zack, JD, LLM, MSFP, CAP

07.29.20 in Wealth Planning & Investing

Estimated Reading Time: 6 Minutes (1014 words)


The world of financial services is constantly evolving. The number of robo-advisors continues to grow, taking a larger share of the market with them. And then there’s the DIY approach to investing preferred by many millennials and Gen Z-ers. With both options costing less than a traditional advisor, how can you evolve while maintaining your competitive advantage? By putting holistic financial planning into practice. But what is holistic financial planning—and where do you begin

What Is Holistic Financial Planning?

Let’s start with what holistic planning isn’t. It’s not akin to financial planning software, which requires you to gather a lot of data (e.g., assets, liabilities, expenses, income needs) and then produces results. In turn, it’s not the same as a robo-advisor, which plugs in the numbers, creates a portfolio allocation, and, in most cases, continues to rebalance to keep the right mix of investment assets. Instead, holistic financial planning takes a much broader approach.

It involves getting to the core of what’s important to clients and helping them achieve their goals through management of their financial resources. Put simply, holistic planning allows clients’ goals and dreams to be the true driver behind everything that is done with their finances, rather than letting their finances dictate their future. Sounds great, right? So, let’s talk about where to begin.

Start Your Holistic Planning Journey

Even if you haven’t pursued the CFP® certification (long considered the gold standard in the industry), the standards set forth by the CFP Board are a great place to start your holistic planning journey. Just consider for a moment how the board defines financial planning:

“A collaborative process that helps maximize a client’s potential for meeting life goals through financial advice that integrates relevant elements of the client’s personal and financial circumstances. Relevant elements of personal and financial circumstances vary from client to client, and may include the client’s need for or desire to develop goals, manage assets and liabilities, manage cash flow, identify and manage risks, identify and manage the financial effect of health considerations, provide for educational needs, achieve financial security, preserve or increase wealth, identify tax considerations, prepare for retirement, pursue philanthropic interests, and address estate and legacy matters.”

In fact, what we have here are the cornerstones of holistic planning: preparing for the unexpected (e.g., an illness or death), providing for a family, and determining the type of legacy clients want to leave (for both their family and their community). To assess clients’ circumstances relative to their goals, you must first gather the necessary quantitative and qualitative information.

The quantitative. Quantitative information includes “a client’s age, dependents, other professional advisors, income, expenses, cash flow, savings, assets, liabilities, available resources, liquidity, taxes, employee benefits, government benefits, insurance coverage, estate plans, education and retirement accounts and benefits, and capacity for risk.”

The qualitative. Qualitative factors include “a client’s health, life expectancy, family circumstances, values, attitudes, expectations, earnings potential, risk tolerance, goals, needs, priorities, and current course of action.” Gathering this data should be relatively easy. But to uncover a client’s values, attitudes, and priorities, you first need to know the right questions to ask.

Ask the Right Questions

In their book, The Right Side of the Table, Scott and Todd Fithian propose the “discernment” style of advice. At its core is “the fundamental belief that when it comes to creating a vision for their wealth, the clients possess all of their own best answers. They simply need the right questions and a compassionate listener.” According to the authors, these “right” questions can be found in “the planning horizon.”


The Planning Horizon


Those conversations above the planning horizon involve “the wealth holder’s deepest and most personal intent for their wealth.” Below the horizon live the conversations on “the strategies and products that can influence the achievement of the wealth holder’s goals as identified above the horizon.”

When it comes to holistic planning, you’ll want to spend most of your time asking above-the-horizon questions, such as, “What are you afraid of?,” “What sort of legacy do you want to leave?,” and, “How would you like your wealth to affect the lives of your children?”

Follow the Formula

You must be willing to ask the tough questions discussed above, but do so in a way that’s palatable for your clients. Of course, hard-hitting questions like these require a great deal of trust between you and your clients. Fortunately, trust (according to the book) is the result of a fairly simple formula:

Credibility + Reliability + Intimacy


Start by demonstrating your expertise and providing accurate information. Next, do what you say you will—and with the quality promised. Last, but certainly not least, always put your clients’ interests ahead of your own.

Create a Service Menu

Despite the value-add that holistic financial planning provides to your clients, the fact remains that most advisors charge a 1 percent fee for their services, while robo-advisors generally cost half that (or even less). To successfully navigate this potential roadblock, you may want to reduce your asset management fees and then supplement those fees with financial planning fees.

Under such a model, you can create a menu of services, such as business planning, charitable planning, estate planning, or planning for health care needs. You then assign a fee to each service. Alternatively, you can use an hourly billing model. Either way, you can clearly demonstrate the monetary value of the services you provide, something a robo-advisor—or a human advisor who focuses solely on investment management—can’t.

Be the Trusted Advisor

You likely have clients with unclear goals that may change with little notice. Others need advice on how to switch careers and start a business. Still others may need help navigating the inevitable curveball, like a job loss, silver divorce, or health care event. By putting holistic planning into practice, you will be well positioned to provide the expertise and emotional support clients need to get through these kinds of situations. Earning your place as a client’s most trusted advisor will help ensure the longevity of your relationship. And, for many clients, the additional fees you charge will be well worth it—simply for the human element you provide.

This material is for educational purposes only and is not intended to provide specific advice.

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