by Michael A. Branham, CFP®
Our lives are rarely, if ever, in neutral.
New experiences inform us daily, new surprises (good and bad) occur frequently, and we’re forced to adapt to our situational existence on a regular basis. Life’s changes, like the tides, include advancement and retreat, and we spend significant parts of our lives adjusting. It could be something seemingly trivial, like having to take a different route to work on a given day due to a traffic accident. Or it may be something more impactful, like a promotion at work, being laid off, a divorce, or more happily, a marriage. The constant flux in our lives can impact us in ways we may never imagine.
Change is not unique to our current lives, or our “todays”, but also impacts our “tomorrows.” Whether it’s an actual change in our goals or vision of our future lives, or whether current circumstances change what is possible or desirable in the future, we must give thought to the impact of events, and the paths we choose, to realize our goals and dreams.
Noted author Patrick Lencioni has said, “Life is full of surprises: new opportunities come up; that’s part of the fun—the adventure of life. The thing is, chaos doesn’t allow us to enjoy the adventure.” As CFP® practitioners, we help you navigate life’s surprises—to take advantage of new opportunities and assess potential threats—within the context of your goals and aspirations. We frequently communicate financial planning as an ongoing process that requires ongoing attention and care, not a static product that you can implement, put on a shelf, and leave to auto-pilot.
And we believe financial planning, at its best, has two key characteristics- it’s iterative and delegative.
Iteration is key to the financial planning process. The initial plan delivered to you is important in setting the stage, and in making recommendations to create momentum towards your goals and planning objectives. With that said, it’s simply a snapshot in time. We know that “life happens,” and that the right path today could very quickly need adjustment.
You might get, lose, or change a job. Marriages, children, and divorce all impact the planning process. A death in the family could change our approach dramatically, either due to inheritance or due to personal loss. Many of these are potential changes we consider in our initial work, but when they become reality—action is needed. An ongoing discussion and modeling can help to avoid, or at a minimum mitigate, the chaos Lencioni references in the quote above, and allow you to focus on the adventures of life.
John Longstaff, CFP®, one of my business partners at The Planning Center, expresses the next point perfectly. He says, “When we work with you, we want you to delegate, not abdicate.” Your involvement in the planning process is integral to our helping you reach your goals. We rely on you to provide relevant new information as it happens, and to take a vested interest in your future. There are different levels of delegation, but all require collaboration and shared common outcomes.
There are numerous consumers who do not work with planners, citing their ability to do things themselves or the desire to “save money.” What’s missing in those choices is an objective third party that can frame scenarios and make recommendations without the risk of emotional interference or confirmation bias. Working with a CFP® practitioner also ensures you have access to expertise that changes with the times, and stays current with the latest research and thought leadership in an expanding knowledge base. And maybe most importantly for you, working with a financial planner allows you to focus on what’s important in life—to spend your time on those activities you find most fulfilling and rewarding.
Thoughtful decisions can keep your plan on track
As you reflect on your life, think about the last three years. Or five. Or the last decade. How is your life different today? Could you have imagined all that’s happened? Did you have a plan in place that allowed you to effectively adapt at the various inflection points? While you’ll never be able to fully imagine all of life’s surprises (which I guess is what makes them surprises in the first place), engaging in the financial planning process will allow you to make informed, consistent, and thoughtful decisions that can keep your plan on track and help you realize your life best imagined.
Mike Branham, CFP®, is a Sr. Financial Planner in the Anchorage and Twin Cities offices of The Planning Center, a fee-only financial planning and wealth management firm. Email him at: firstname.lastname@example.org.