Have you heard of holistic financial planning?
Holistic financial planning creates a balanced whole, that is greater than the sum of its parts.
Holistic financial planning is an innovative approach to financial planning advice that is, quite literally, the way of the future.
Before we explain holistic financial planning, let us remind ourselves of what we traditionally accepted as financial planning advice.
Traditionally, we have gathered up the financial products we buy on a casual, gradual basis, in response to situations that arose as we moved forward through our lives. We needed a loan to buy our first car, later we needed a mortgage, perhaps at the same time we got married. Our first child came along, at which point we bought life insurance to protect our new family. With these keystones in place, we finally got around to thinking in the longer term, and set up our pension plan – at the average age of 32, according to the pensions lenders.
Each of these decisions came singly, and often based on product advice of differing quality, from a range of different sources.
The result was a mixed bag of financial products, a patchwork financial plan that was neither properly balanced, nor regularly reviewed and adapted to take account of changes in the markets, and our evolving financial circumstances.
In our choice of mortgage, for example, we may have overstretched ourselves, in order to buy a home at the top end of our ‘affordability scale’. As a result, we may have delayed setting up a personal pension by several years, due to this imbalance in our financial plan.
In a holistic financial plan, each element - personal insurance, mortgage planning, savings and investment planning, pension and retirement planning, and tax and estate planning – is discussed by your financial planner at the outset. The result is a balanced plan and an ongoing advice relationship that takes the measure of our present financial needs, while looking to the horizon and bearing in mind our needs in the future, as well.
Holistic financial planning takes into account not only our personal principles and risk profile, but also our financial needs today, tomorrow, in 10 years, and upon retirement.
Independent financial advice on holistic principles will avoid solutions that are simply a ’sticking plaster’ reaction to a short-term situation. A holistic financial plan will temper short-term ambitions with the longer-term challenges of building up pensions and investments, as a means of securing a comfortable retirement.
Were you aware of holistic financial planning – or are you interested in hearing more? Blog here and tell us your thinking now!
