Let Me Clarify
The Financial Planning Puzzle

Unless you’ve always been healthy as an ox or avoid modern medicine, I’m sure you’ve seen more than one kind of doctor in your lifetime. This might include visits for your general health, your eyes, your heart, your allergies, etc. Why should your financial health be approached any differently?

Let me clarify.

Imagine if people refused to see anybody but their primary physician. For example, how many people would be walking around blindly if they refused to see an eye doctor? Now think about your financial health. Investments are just one component. You could be walking through your financial lives with a lot less clarity if you’re not also evaluating the other important areas of financial planning.

Fees aside (checkout my recent post on that specifically, if you’re interested), there continue to be debates and many misunderstandings about the true benefits of financial planning, as opposed to investment management. If you’re not familiar with the idea of “financial planning”, it incorporates many different areas into one comprehensive plan. Typically, planning would cover cash flow, investments, retirement planning, insurance, income taxes, and estate planning. Education funding and other niche topics may also be included, but the previously mentioned areas should always set the foundation.

A perfect example of the benefits of financial planning presented themselves throughout the recent market events. Those who are working with a good financial planner probably even recognized opportunities, despite a time of historic job losses, slowing domestic production, and other negative occurrences during the global pandemic.

My hope is, if you’re working with an investment professional, that you had the important conversations about the risk and allocation within your portfolio (ideally, well before the recent market events) and received basic assistance with rebalancing and talking through the concerns you may have. However, there are many gaps I continue to see, at the expense of solely focusing on one individual piece of the puzzle.

Were you also presented with conversations surrounding refinancing opportunities, tax-loss harvesting situations, the impact of delayed RMDs for the remainder of the year, the chance for conversions at lower share prices, or changes that could be made to your charitable planning, to name a few? I can’t speak for every individual situation, but I’d find it hard to sleep at night if I knew that our clients were missing out on these services and potentially thousands in future dollars and tax savings.

Equally as important as evaluating all areas of the financial plan, is being sure they coordinate together. Sure, you can work with an investment advisor, and an insurance rep, and a tax advisor, and an attorney, and a life coach separately. But, what if there’s miscommunication between yourself and the perspectives of the many different professionals? As you can imagine, there’s a high likelihood for there to be costly mistakes in addition to the various fees that you’re paying for each consultant.

Luckily, this can all be solved by working with a financial planner, especially when he or she is part of a team. It’s great to have various approaches and as much information as you can gather. However, much like a puzzle, if any piece is missing or doesn’t fit, it will never be complete.

[Check back next time to learn about what it means to work with a CERTIFIED FINANCIAL PLANNER™ (CFP®) specifically and how that most sought out designation takes this important concept even further.]

As we embark on this clarifying journey together, I encourage you to submit any ideas, topics, or questions to info@clarifywealth.com. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for any individual. “Let Me Clarify” is a weekly blog containing Chad Baxter’s insights and thoughts about a variety of topics. To learn more about Chad, click here


All performance referenced is historical and no guarantee of future results. All investing involves risk including loss of principal. No strategy assures success or protects against loss. This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation. Clarify Wealth Management and LPL Financial do not provide legal advice or services. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.