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At Taylor Financial Group (TFG), we believe that every client should have a comprehensive financial plan updated annually (at the least). However, with a comprehensive plan comes non-scalable work and in-depth analyses that can take many hours. The plan can also quickly become outdated, sometimes as soon as the client walks out of the meeting. We also find that most clients have difficulty digesting the full plan and understanding the bottom line.
Our one-page financial plan
To summarize and simplify the full plan, we have created a one-page financial plan. Our one-pager does not replace the full plan, but acts as a cover page or executive summary to the full plan. In addition, the one-page plan helps make plan updates more streamlined and efficient.
Plan updates occur on client request, and before most client meetings. But we also update everyone’s plan during the summer and send it to them with an offer to meet and discuss the update. So, simplifying the process will be a changemaker for everyone involved.
Build out key categories
When creating out your firm’s one-page plan, make sure to be relevant, meaningful, focused and concise. Below we list what we consider the seven key areas to cover.
- Net worth and investable assets
- Overall portfolio allocation
- Breakdown of accounts by taxable status
- Monte Carlo simulation
- Total portfolio assets
- Percent of guaranteed income at retirement
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Confidence age
These are all pulled directly from eMoney, our primary financial planning software. Using these categories, we can summarize a client’s full financial picture, addressing their current household value (net worth and investments) as well as future plan projections (Monte Carlo simulation, ending portfolio assets, potential tax implications and guaranteed income sources). Our one-page plan highlights all of the key data needed for the client to understand where they are at present and where they will be in the future (assuming no changes to the plan).
Address action items
We split up action items into two sections: the first is short-term and lists the highest priority financial items being worked on in the next three to six months. The other is longer-term, so we can acknowledge that we actively listened to all the client’s concerns, and have made note of items lower on the priority scale.
Include client goals and track progress
At the bottom of the one-page plan, we have a section that breaks down client goals, the status of the goals and includes descriptive notes as necessary.
The image below shows a sample of our one-page financial plan. (Firm disclaimers are included on the second page.)
TFG One-Page Financial Plan
Source: Taylor Financial Group
Benefits for you and your clients
Now that we know what is included on the one-page plan, you may be asking what the benefits are of putting together yet another item in your already extensive planning process. Below are four reasons why we believe you should be creating a one-page financial plan for your clients.
1. Concise and easy to understand
The first benefit is solely client-centric. The one-page plan translates all the key technical data into simple graphics and charts which should make things clear to even the most non-academic client. A client can see all of the information laid out on one page and can quickly understand their current financial status. We believe this approach to be better than an overly complex binder or a to-do list that overwhelms clients and is therefore unlikely to be put into action.
2. Provide quick updates
In addition to providing an executive summary for the full plan, the one-pager makes it quick and easy to provide plan updates. Because we create a PowerPoint when presenting our full plans, it could take hours to update the full plan every time a client wants to see how they are doing. The one-page plan only takes about 15-20 minutes to update, and it provides all of the critical information that the clients are looking for.
3. Track client progress
The third benefit comes down the road, after you have incorporated the one-page plan for clients over an extended period of time. When the document has been updated multiple times, it provides an evolving picture of how the client has improved their financial wellness over time. As the client relationship evolves, we can reference previous one-page plans and effectively create a timeline of the client’s financial life, pointing out what has been accomplished in chronological order.
4. Creates dual accountability
Lastly, the one-page plan creates accountability for both the client and the advisor. It can keep both parties accountable because it includes a list of current and future action items as well as client goals and progress towards those goals. With these items spelled out, the plan lets clients know what is expected of them and what they can expect from you as their advisor. The one-pager becomes a great way to track and address all the financial strides and accomplishments that have occurred as a result of the advisor/client relationship.
Creating this resource, the one-page financial plan, can help you to summarize the most meaningful information in a financial plan for clients. For most clients, it can become a powerful tool that you can regularly update as life happens. In addition, it helps to hold both the client and the advisor accountable and is the perfect way to keep everyone on the same page—literally!