The Five Disciplines of Effective Financial Planning

Instead of focusing solely on investing, a holistic financial planning approach considers five interdependent disciplines:

1. The Overarching Plan

 It all starts with purpose.

Before diving into spreadsheets, numbers, or allocations, you need to understand what your client cares about. This process – sometimes called “vision crafting” – is inspired by thought leaders like Simon Sinek, Bill Bacharach, and Norm Trainor.

Good advisors ask the hard questions:

• What’s important about money to you? Why?
• If money were no object, how would you spend your time?
• What legacy do you want to leave?
  

Once the “why” is defined, a great advisor treats every client’s finances like a business:

• What’s your net worth?
• What’s your income vs. spending?
• What does your 5-year and 30-year financial trajectory look like?

And perhaps, the single most important question of all:

• What are you most afraid of?

Good financial planning is as much about helping people achieve their dreams as it is about avoiding their nightmares.

With this full picture, planners help uncover hidden inefficiencies, prioritize goals, and design a roadmap that adapts as life evolves.

2. Planning Is Complex: There Are 27+ Financial Instruments

Financial security isn’t just about what you grow – it’s also about what you protect. In many ways, it is not different from a mechanic tuning up a car. An advisor reviews all financial “parts” to see what‘s working, what needs cleaning, and what should be replaced.

Some clients have solid disability or life insurance. Others may have outdated or underperforming policies. A strategic advisor helps retain what’s effective, remove what’s broken, and fill any protection gaps.

In recent years, we’ve seen numerous environmental catastrophes leave families financially devastated-often because they didn’t have flood insurance or windstorm coverage. Just because something hasn’t happened before doesn’t mean it won‘t happen in the future.

Because when life throws curveballs – like illness, accidents, or lawsuits – preparedness can mean the difference between recovery and ruin.

3. Planning for Life, Not Just Growth

Taxes are often the single biggest drain on wealth. That’s why smart tax planning is one of the most powerful ‘levers’ you can pull in any financial plan.

A high-quality advisor evaluates what we refer to as the 4 major taxes:

Current tax:

• These are the income taxes you pay on your earnings-whether from a W-2, K-1, business income, or other sources

Ongoing taxes:

• These are the taxes you pay on the Investments and savings you have: capital gains, dividends, and interest

Distribution taxes:

• When you move from ‘person at work’ to ‘money at work,’ you may face taxes on reallocations, retirement withdrawals, and required minimum distributions

Ultimate taxes:

• AAEstate taxes: Transfers to heirs and charitable giving

By minimizing unnecessary taxes through tax-loss harvesting, Roth conversions, charitable strategies, and trust structures, advisors unlock exponential value. As the saying goes, “It’s not what you earn. It’s what you keep.”

4. Money Management

Yes, investing matters. But it’s just one part of the picture. And most advisors offer similar returns. Where differentiation happens is in the how and why behind investment decisions.

When it comes down to it, there are really only five ways to build wealth:

• Born into it
• Marry into it
• Own real estate
• Own a business
• Generate savings

You can’t control your birth, and marrying into wealth often depends on whether you’re born into it. Owning enough real estate to make you wealthy or running a wildly successful business happens, sure. But for most people, true financial growth comes from sound decision-making and discipline, not risky bets.

In other words, generating savings. Avoiding mistakes (like misallocated assets or speculative investments) is far more powerful in the long run than getting lucky with some stock picks once in a while.

5. Estate and Asset Protection

Estate planning isn’t just for the ultra-wealthy. Anyone with assets-or even just values they want to preserve – needs a plan.

Without clear instructions, wealth can be eroded by:

• Probate and legal costs
• Taxes (the federal estate tax exemption is $13.61 million in 2024)
• Lawsuits, divorces, or family disputes

Properly structured trusts, asset protection plans, and gifting strategies ensure your wishes are honored and your legacy is protected.

Estate taxes can be mitigated with the right planning. The best advisors make sure what you’ve built continues to benefit the people and causes that matter most to you.