There’s a lot of buzz words in the financial planning industry (like many others) and we’re pretty sure you would’ve come across integrated wealth planning. You may or may not however really know what it means. Using the analogy of a soccer game, let’s explore.
The meaning of ‘integrated’ is ‘various aspects linked or co-ordinated’ and that is at the core of this discussion. Rather than having disparate elements to a financial plan running independently of each other, an integrated financial plan uses the power and leverage of integrating your financial planner, accountant and financier to maximise your advantage and minimize your risk.
Imagine yourself as the viewer on the sideline barracking strongly for your team but not actually on the field doing the running around. You can see the shifts and moves on the field, you can see the team pushing for the goal but all you have to do is cheer when the ball hits the nets. And so works an integrated plan.
But before we go further, the imperative thing is to set the correct goal in place to start with, and that requires discussion with you and your partner or any other involved party. Questions need to be asked like:
- How will you quantify investment success in 5 or 10 years time?
- What do you want to use the money for?
- How does complexity or uncertainty sit with you?
- How are your circumstances likely to change in the future? (ie children going to private schools, changes of career, moving house)
Asking questions like these allow your wealth management team to understand you as an individual, your circumstances, your risk acceptance level, timelines on your goals and many other aspects that will formulate specific goals and parameters for your plan.
So we have our goal cemented into the ground, what sort of strategies can your team provide? The aim of course, like a soccer game, is to get to the goal with the least amount of collateral damage and in the quickest time possible. There may be numerous ways of getting there but the expertise of your team is to work out the ideal for you. And no doubt you’ll be watching closely on the sidelines!
Here are some examples of how an integrated plan can work hardest for you:
- Savings on your home loan interest can be used for investing
- Paying off your home loan sooner means equity to buy another property
- Outlay on cars and other loans need to be assessed to see how it will affect your wealth goals
- If you increase debt, is your life insurance and income protection adequate?
“Unity is strength. Where there is teamwork and collaboration, wonderful things can be achieved” Mattie Stepanek
And of course, like any good soccer team, you need to review how you are progressing and tweak any elements along the way. At the least an annual review is essential to keep the plan on track.
So choose a team you have trust in, take the time to set the goal properly, and sit back and watch them sweat it out to your advantage! Contact us today.