Bridging Your Life’s Financial Plan With Your Investment Management Strategy

By: Kathleen Clough

So, you’ve got money in RRSPs, more in the bank, some property, and a thriving business or career on the go. These are your life investments, but are they tied to your life’s long-term financial plan? Do you have a plan for yourself or family that identifies your financial goals, expectations or where you want to go in life?.

As a PWL client, you already recognize the value of planning and strategy. However, many people do not have a financial plan thought out. Too often, people think having investments or assets at work “somewhere” is good enough. Your expectations for your money may be headed in an entirely different direction than your current investment “strategy” if you haven’t linked them together.

When meeting with clients, I ask them to articulate their retirement plans. With couples particularly, many have not fully discussed their expectations and goals for retirement. Over the years, I have found it is not uncommon for one partner to want to travel the world while the other might want to live on an island in simple tranquility. Fortunately, most couples are able to find a common ground, and we can start talking about the money they would need in the future and how to get there. Some couples, for example, may want a future life of golf, horseback riding and other leisure activities, so keeping a home in the city may not be a priority. As an advisor creating a personalized investment strategy, that is important to know.

PWL advisors can help you develop a financial plan for your life, as opposed to an investment or risk strategy for your money. This is more than just a discussion about dreams and wishes. It is about your personal values and specific goals. Often, just asking clients “how much do you spend each year?” begins a good conversation about goals and long-term plans.

By bridging a life financial plan with an investment management strategy, an advisor can determine when liquidity is needed; advise on when to buy or sell assets and recommend steps to stay on track. Without knowing the long-term financial plan, in my view, a client is not properly served by any advisory firm.

Also important is remembering a financial plan needs periodic recalibration — every year or two should do it, unless significant changes occur in your life. Your assets, goals and plans are not static. Do you want to leave a large estate for others or spend every last dime? You also may acquire foreign property as you age, divorces or separations can arise, and your lifestyle will change over time. Ultimately, your investment strategy must always be driven by the life you want.