The Value of Financial Advice, Part 2: The Rest of the Story
In “The Value of Financial Advice, Part I: What Am I Paying For Exactly?”, I took you through the value of financial planning in both quantifiable efficiencies and qualitative improvements in your stress and anxiety. That is, assuming a trusting relationship, there can be a significant reduction in stress and anxiety knowing that a financial professional has your back. I ended that article with the conclusion of the onboarding process. So, the obvious question is, then what happens?
Well, quite a lot as it turns out which is why I am writing this article. While the initial onboarding is important, I’ve found that recommendation implementation takes time, a lot of time actually. No matter how simple one’s finances seem on the outset, once we dig in, there’s always at least one thing that’s a difficult hurdle to overcome. That’s where the rest of the values-first service steps in.
Financial planning is not a one-time event; life keeps moving. Families change. Priorities shift. Military (or workplace) rules update quietly in the background. And so we’ve already identified two broad areas of financial planning that take time to implement. The first is getting your financial life from where it is today to where you want it to go. The second area is once you get your financial plan in place, keeping it there. If your plan does not move with you, it can become outdated much faster than most people expect.
Thus, while here at Formynder Wealth Management I can and do engage in short-term project work, the real value is in ongoing planning to keep your financial life current, organized, and aligned with the direction your family is heading.
You might be thinking, “Ooof, this is a lot. I thought I was hiring you so that I didn’t have to do as much work.” Well, yes, of course I’ll do as much as I humanly and legally can in terms of planning and implementation, but this is your plan and you are still in the driver’s seat. During implementation, I can and will do a number of tasks that don’t require your inputs, but are informed by your inputs. However, the reality is that you may have to hop on a call with a retirement plan manager or your insurance agent, or log into your accounts to make changes. I am here to support you through these less-than-exciting areas of finances and celebrate with you when these dreaded tasks are over! In most cases, I see this take upwards of a year, but can vary depending on your motivation level. But as I mentioned above, that only addresses the first area of financial planning – the initial plan.
There’s more? Oh, there’s so much more in the second area of financial planning – upkeep. Throughout the year, I work in the background to ensure that as the Earth makes a few trips around the Sun, your plan evolves with the inevitable changes in pay, taxes, benefits, and your own life. At Formynder Wealth Management, at minimum, this results in two strategy sessions per year where we can catch up on what’s occurred in the last 6 months and plan for any changes in the next 6 months. In reality, the minimum rarely happens. I usually send reminder and update emails, get on calls with you, and otherwise become a year-round sounding board to financial decisions you are making, but simply want a second opinion on. Here are some of the finer points of change considerations.
Income, Spending, and Savings
Cash flow has seasons. Promotions, special pays, BAH adjustments, or entering retirement all change the way money moves in your household. So do growing kids, college planning, or shifts in your career path.
Regular reviews help us:
Adjust savings targets
Adjust discretionary spending targets
Manage taxes based on income
See spending patterns clearly
Taxes
Same as chow while deployed in the field, tax planning is continuous. Rules change at the federal and state level, and military families often deal with unique situations like multistate filings, tax-free income, rental properties after PCS moves, and transitions into civilian employment.
Throughout the year I review:
Upcoming tax law changes
How new rules may affect your withholding or estimated taxes
Opportunities for tax efficient savings
TSP and IRA contribution strategies
The impact of bonuses, special pays, and deployments
Planning ahead for retirement income taxes
Small adjustments made early can prevent surprises later, especially for families preparing for military retirement or their work-optional phases of life.
Insurance
Insurance is one of the easiest areas to set and forget, and also one of the easiest to let fall out of sync with your life. As your family grows, income changes, or you move toward retirement, your life insurance, disability coverage, and survivor protections may need to shift as well.
This includes:
Reviewing SGLI and FSGLI elections
Planning for VGLI or private coverage as you approach transition
Checking disability insurance options if you move into civilian employment
Keeping beneficiary designations aligned with your intentions
Evaluating Tricare and supplemental options as retirement gets closer
These reviews help make sure your family is protected, but not overinsured. We want to minimize risk gaps.
Military (or Other Workplace) Benefits
Rules around Tricare, TSP, BRS, VA benefits, COLA, and even simple DFAS processes shift often. Many updates do not make headlines, but they still affect your life.
I track these changes and as I see areas we can take advantage of, you’ll get a note or a call from me.
Of course, there are the regularly occurring benefit changes we know about such as open enrollment each year and contribution limit increases to your workplace retirement plan. You get reminders and personal recommendations for each benefit available to you.
Investments
If you think about investment management as a crock pot, your risk tolerance is the “warm, low, and hot” settings. If I’ve done the work correctly, the investment choices in the crock pot are diversified, low-cost, tax efficient, and otherwise, fundamentally sound with little need to change. Your risk tolerance, however, can and will likely change over time. While we might start on hot with an aggressive equity to fixed income ratio, you may feel more comfortable on the low or even warm settings. Between measuring your risk tolerance and simply being available to help you stay the course when the market does what the market does, I provide a year-round ear.
Estate Plans and Beneficiary Choices
This is most commonly one of the most difficult areas of financial planning to design and implement, mainly because nobody likes to think about their own demise. What’s worse is that even after all the work that goes into an estate plan, the moment it’s in place, it begins to decay. Changes in your family, new accounts, remarriage, a guardian you’ve had a falling out with, or even a move can make old documents incomplete. A revisit even every two years will prevent a seemingly insurmountable task of a complete redesign 10, or even 5 years down the road.
Your Goals and Values Mature
Life looks different every few years. What mattered at the beginning of your plan may not be what matters now or what will matter in the future. That is normal.
Ongoing planning gives you space to talk through:
New opportunities
New priorities
Shifts in your family needs
Growing faith and life direction
Financial planning is hardly just about money – it’s about staying anchored to what is most important and a semi-annual review at minimum helps to define or redefine what your finances are anchored to.
Your “plan” (intentional lowercase “p”)
We plan, God laughs. I’ve heard that a number of times throughout my life and yet, still try for the ultimate PLAN. The point is that building a “Plan”, (uppercase “P” emphasizing the rigidity of “The Plan”), hardly ever works. It’s for this same reason, flexibility is built into bridges and buildings; When earthquakes hit, the inflexible break. As someone who grew up in Central California in the 1980’s and 90’s, I know all too well what that looks like.
Touchpoints throughout the year enable flexibility to change when necessary so that when your life’s earthquake hits, your plan supports and maybe even shifts a little, but it doesn’t break. These touchpoints provide:
Clear recommendations when decisions pop up
A plan that reflects your real life
Support when questions or challenges show up
Fewer surprises and fewer avoidable mistakes
Peace of mind
The Value of Planning, In Every Sense
As Paul Harvey ended his famous radio show “And now you know, the rest of the story.” (Hopefully a few of you got that.) My desire with this two-part series is simple: that I’ve conveyed the value of financial planning as both qualitative and quantitative. Yes, there are measurable outcomes like clearer cash flow, better tax management, organized benefits, and progress toward long-term goals. But there is also the quieter value that matters just as much or maybe even more: confidence, clarity, steadiness, and knowing you do not have to figure all of this out on your own.
Good financial planning gives you structure and direction, and it gives you peace of mind. It equips you with numbers, and it honors your values and the life you are building. Both parts of this series point to the same truth. The math, behaviors, emotions, and you - all matter.
Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Read the full disclosure.