THE HOLISTIC FINANCIAL PLAN
The Future of Personal Finance Requires an Advisor Who Is
Conversant With All Aspects of the Client’s Life, Not Just Their
Investments—Not Even Just Their Finances.
Authored By:
Kelly Adams, CFP®, EA
Ken Robinson, JD, CFP®
www.acplanners.org
Praconers of the holisc model, while increasing in number,
remain a disnct minority of professionals holding themselves
out as nancial planners. A holisc nancial plan is not normally
available where consumers commonly get nancial advice: their
tax preparer, insurance provider, lawyer, bank, and investment
advisor.
The purpose of this paper is to explain the disnct benet holis-
c nancial planning can provide. We believe this model is the
future of the profession, as clients increasingly understand they
can obtain customized advice on not just taxes, investments,
and insurance, but life events such as costly higher educaon,
personal challenges like job concerns, and family maers like
aging and ailing parents. All the client’s nancial maers can
be considered as a unied whole, increasing the likelihood of
achieving the client’s goals.
Importantly, the holisc nancial planning model provides a
natural t with the profession’s increasingly important duciary
standard, which many clients specically seek in their profes-
sional planning relaonships.
CONTENTS
1
Introducon
The weaknesses of the purchasing decision model of
nancial planning
Working in harmony: the holisc nancial plan
Characteriscs of a holisc nancial plan
Licensing
The duciary standard
Comparison with other planning models
Advantages and disadvantages of the holisc planning
model
The future of the holisc nancial planner
Conclusions
INTRODUCTION
An investor moves his assets to a new advisor, who sells a large
poron of the account, and reinvests in one of the rm’s ac-
vely traded porolios. The advisor has never seen, nor asked
for, the client’s income tax returns. The client doesn’t realize
the advisor’s acons will generate greater income tax liabilies,
and complicate his tax returns.
A homeowner reviews a quotaon for umbrella liability cover-
age suggested by his insurance provider, then struggles with
the same nagging queson that arises whenever he is consid-
ering coverage his agent suggests: is this new policy in my best
interest, or the agent’s?
Aer paying for years of her son’s children’s private school
tuion, an elderly client has her aorney update her will. Con-
sidering her previous generosity, she bequeaths her son a xed
lump-sum payment and, to achieve some parity, names her
daughters to receive her remaining assets. The aorney does
not ask about the tling of her accounts, and the client as-
sumes her new will supersedes the beneciary designaons on
her brokerage and rerement accounts—which name all three
children as equal beneciaries. When the client dies soon
thereaer, her son receives not only one-third of the brokerage
and rerement accounts, but also most of the proceeds from
the only estate asset, the client’s home.
The past few decades have seen an increase in consumer
awareness of the need for detailed nancial planning. This
has reinforced growth in the range of services provided by
the profession, which has made substanal inroads to benet
more consumers. Why, then, are so many consumers’ eorts
to manage or improve their nancial situaons ineecve, or
even counterproducve?
Typical sources of consumer nancial advice are sll segregat-
ed by subject. It is rare for a consumer’s provider in one area to
consult with her providers in others. Without this coordinaon,
conicts harmful to the consumer oen arise, and valuable
planning opportunies are lost.
These shortcomings can be overcome using a holisc nancial
planning model, in which the advisor has hands-on involve-
ment with all areas of the client’s nancial life. While she may
not be the subject-maer expert needed to execute every
aspect of the plan—for example, the typical client will sll need
an estate planning lawyer and an insurance agent—the holisc
nancial advisor’s in-depth knowledge of the client’s life can
yield a coordinated nancial plan that eciently moves the
client toward his nancial and life goals.
THE WEAKNESSES OF
THE PURCHASING
DECISION MODEL OF
FINANCIAL PLANNING
Most consumers receive nancial advice when they are in the
market for a nancial product or professional service. They
choose a course of acon when they make a buying decision,
but rarely do so with any strategic plan. In much the same way
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7
7
CONTENTS
2
as they might consider shoes, a car, or groceries, the typical
consumer’s interacon with nancial products and services is
a series of disjointed purchasing decisions.
Early in the calendar year, the consumer receives a stream
of income tax data, and hires a tax preparer, who prepares
the return. The preparer may request addional data to help
reduce the current year’s tax liability, but usually will not
perform mul-year tax planning. If the preparer does oer tax
planning projecons their compensaon model may cause the
consumer to wonder whether the service is worth the cost, or
is just a way to increase the fee.
A large tax refund may lead to a bank visit, where the teller is
rewarded for sending customers with larger balances to the
bank’s investment representaves. Once there, the consumer
cannot decipher whether the invesng specialist’s objecve is
merely to make a sale.
When the consumer moves to a new home, he may seek new
insurance, focusing on how much property coverage is needed
while not understanding
his liability exposures
or important coverage
details. The broker
or agent may make
a recommendaon
without considering
the consumer’s net
worth, relying instead
on sales guidelines to drive product placement. Ulmately
the consumer leaves having made a buying decision, but may
not understand what his insurance will cover in the event of a
catastrophe.
At work, the consumer may have choices to make about
his employee benets. For instance, there is life insurance
and health care coverage to select, and possibly whether to
contribute to a Health Savings Account. He may be oered
coverage for disability, long-term care, or accidental death and
dismemberment. For each, he needs to decide how much (if
any) to buy, and whether the coverage is worth the premium.
His company’s human resources department typically does
not provide individualized guidance, and if he consults his
own insurance agent, he may be oered a compeng product,
leaving the consumer to wonder again about sales bias.
He is oered parcipaon in his employer’s 401(k) or other
rerement plan, and is provided plenty of informaon to
evaluate the various investment opons. But this oen causes
more confusion, leading him to choose investments based on
rates of return only, which can produce a highly concentrated
The client, intelligent and
educated though he may
be, typically isn’t suciently
conversant with nancial
maers to be able to see
when one expert’s advice
conicts with another’s.
porolio. Or, out of confusion and frustraon, he might select
a target-date fund that may not be an appropriate choice for
his situaon.
Changing marital status, becoming a parent, or receiving
sad news from friends or family may lead the consumer to
consider wring a will. His lawyer formulates the estate plan,
prepares the documents, and supervises their execuon. If
he asks about non-probate assets, the lawyer likely relies on
the consumer’s recollecon of named beneciaries on these
accounts.
The investment advisor that an acquaintance suggests prob-
ably charges based on the consumer’s asset base, which can
lead to a focus on increasing returns by adding risk. Not skilled
in income tax preparaon or planning, the advisor may rec-
ommend transacons that increase income tax liability, while
the client is le to speculate about whether the advice was in
his best interest.
Of the many professionals the consumer consults, few oer
meaningful guidance on cash ow—a crucial focus of plan-
ning for nancial independence. While nancial goals may be
discussed, life goals oen are not. Personal goals too oen
are not seen as nancial, nancial goals oen not related to
personal fulllment. Career coaching is typically not proacve.
College planning amounts to lling out the FAFSA, but usually
omits posioning assets advantageously.
Pity the poor client managing this mul-faceted plan; he is the
only one in a posion to see the big picture. Lacking experse,
he seeks out various professionals, but each sees the client
only through his or her own lens: to the tax preparer the client
is the taxpayer; to the banker, the customer; to the insurance
broker, the insured; to the estate planner, a future decedent;
and so on. Each of these professionals is conversant with his
own eld, but not with the other products being recommend-
The cure for this disjointed common approach is a holisc
nancial plan, in which each part of the plan is designed to
work harmoniously with the others. Just as with the myriad
diering approaches to which labels like nancial planning,
wealth management, and investment management are
applied, the professional usage of holisc is far from standard-
ized.
Merriam Webster denes holisc as:
relang to or concerned with wholes or with complete
systems rather than with the analysis of, treatment of, or
dissecon into parts.
1
A holisc nancial plan views all aspects of the client’s nan-
cial life as parts of a unied whole.
The term holisc makes some advisors uncomfortable; many
praconers of holisc nancial planning never use the label.
Some planners prefer the term comprehensive, other advisors
have adopted the term integrave, and we’ve even seen con-
sulve used. Each term has its place, but for this paper, none
captures precisely the same meaning we intend. Regardless,
the cooperave and mutually supporve interconnectedness
of the dierent aspects of the plan is the important feature,
not the term used to describe it.
3
WORKING IN HARMONY:
THE HOLISTIC FINANCIAL
PLAN
CHARACTERISTICS OF
A HOLISTIC FINANCIAL
PLAN
NO SINGLE MODEL
While there is no standard model of a holisc nancial plan, it
is comprehensive in nature, covering all the common aspects
of a personal nancial plan, oering guidance so that recom-
mendaons on one topic support the strategies recommend-
ed in others.
The model used in the professional pracces of this paper’s
authors is one taught by the Alliance of Comprehensive
Planners (ACP)
2
. An engagement may begin with income
tax preparaon or planning, followed by a porolio and net
worth analysis. Discussion and analysis of various nancial and
lifestyle topics follow (see sidebar, Included in the Holisc
Financial Plan) with implementaon of recommendaons
as appropriate. This in-depth data gathering and subsequent
review provides for specic guidance tailored to the individual
client.
A historically common planning model gathers comprehensive
data at the outset of the
relaonship and delivers
one plan document: a
large binder or electron-
ic le, lled with charts,
graphs, and disclosures.
The client’s experience
of this model may feel
like a massive homework assignment consisng of dozens
of disnct recommendaons—all of which she is meant to
complete as soon as possible. So, the binder oen is put on a
shelf, leaving the client without the benet of the plan she has
paid for.
A holisc nancial plan could be provided in one such lengthy
volume, but all-in-one does not have to mean all at once. The
authors’ experience is that client follow-through is improved
by ensuring he does not feel overwhelmed by the quanty
of recommendaons. Thus, by providing guidance subject
by subject, the client may nd the process easier and, more
importantly, may nd the plan easier to act upon.
Holisc nancial planning
acts on the belief that the
client is best served when the
various aspects of the client’s
plan work in concert to carry
out the client’s intenons.
1
hps://www.merriam-webster.com/diconary/holisc, accessed July 22, 2017.
2
hps://www.ACPlanners.org
ed to the client. The client, intelligent and educated though
he may be, typically isn’t suciently conversant with these
nancial maers to see when one expert’s advice conicts with
another’s.
The consumer’s all-too-common experience of assembling a
nancial plan as a series of ad hoc purchasing decisions, segre-
gated by subject and cobbled together over months or years,
leaves many with disjointed structures that oen are ineecve
and inecient, and notably costlier than they should be.
4
LICENSING
MORE THAN JUST INVESTMENTS
One holisc nancial planner recounts her early meengs
with a client who diligently assembled her most recent
statements from all her investment accounts. As part of
the holisc planning process, the advisor had also re-
viewed the client’s tax returns, where she saw dividend
income that was not aributable to any investment shown
on the statements. The advisor concluded that in addion
to a porolio of about $1,000,000, the client also owned
about $250,000 in one company’s stock. This sparked the
client’s memory about the contents of her safe deposit
box: the shares the advisor had idened were kept in
cercate form.
This had a substanal impact on the client’s investment
strategy. Most importantly, this 25% increase in her
known investable net worth made it clearer that she could
achieve her goal of rering that same year, and allowed
her to have the condence that she could maintain the
quality of life she desired.
For the praconer, there are licensing consideraons to such
a comprehensive set of services. Providing professional tax
preparaon, or represenng clients before taxing authories,
require parcular authorizaons that vary from one jurisdic-
on to another. Likewise many jurisdicons require licensing
to be able to give insurance advice for a fee, even without an
accompanying product sale. The deep details of estate plan-
ning are the purview of licensed legal counsel. And of course,
there are legal requirements, similar in most US jurisdicons
but with details varying from state to state, on providing in-
vestment advice for a fee.
No license is typically required to give guidance on cash ow
(usually called budgeng) or debt management issues. Like-
wise with goal seng, rerement planning, business planning,
or college planning.
Consumers are increasingly interested in nding advisors who
follow a duciary standard of care. This evoluon has been
noted since well before the eecve date of the US Depart-
ment of Labor’s duciary rule in 2017 which applied the
standard to rerement assets. Indeed, we believe a consumer
seeking a duciary nancial advisor typically expects that
standard to apply to the enrety of the professional engage-
ment.
This standard is easily applied to holisc nancial planning.
The deep knowledge the planner gains of the client’s situaon
and intenons during the professional engagement gener-
ates condence that the recommendaons are in the client’s
best interest. The CERTIFIED FINANCIAL PLANNER
TM
Board of
Standards has recognized this by holding CFP® praconers to
a duciary standard.
CFP® professionals have completed extensive training
and experience requirements and are held to rigorous
ethical standards. They understand the complexies of
the changing nancial climate and know how to make
recommendaons in [the client’s] best interest.
3
THE FIDUCIARY STANDARD
INCLUDED IN THE HOLISTIC
FINANCIAL PLAN
• Porolio and Net Worth Analysis
• Record Keeping Guidance
• Spending Plan
• Mortgage Review and Analysis
• Educaon Planning
• Rerement Analysis/Financial Independence
Planning
• Estate Planning
• Pension, Annuity, and Rollover Planning
• Investment Implementaon
• Insurance Analysis: Auto, Home, Health, Disability
Long-Term Care, Life
• Employee Benets
• Income Tax Planning (mul-year)
• Tax Preparaon and Planning
• Coaching on Financial Habits
• Financial and Life Goal Seng
• Small Buiness Consulng
• As-Needed Advice
3
hps://www.cfp.net/about-cfp-board/cfp-cercaon-the-standard-of-excellence,
accessed September 8, 2017.
5
The contrast between the purchasing decision model and
the holisc nancial plan could hardly be clearer: the former
demonstrates the shortcomings prevented by the holisc nan-
cial plan. The holisc approach provides professional experse
at the hub of the client’s nancial decision making, reducing
the chance that the client will make an unwise purchasing
decision.
THE ASSET MANAGEMENT
MODEL
Financial planning is oen equated (inaccurately) with invest-
ment advice. The most pervasive compensaon method not
based upon sales commissions is the assets under management
(AUM) model, in which the professional is paid based on the
volume of assets he oversees. Even if a separate fee is charged
episodically for comprehensive planning, the ongoing AUM fee
encourages the belief that investments are the most important
part of nancial planning, especially if “the plan” is not central
to the client engage-
ment and is treated as
ancillary to the single
ongoing service of
investment manage-
ment.
Without a standard-
ized model for the
holisc nancial planning engagement, the advisor is free to
design their own style of planning, including the depth and
breadth of service they wish to provide. Dierent advisors use
very dierent processes, thus providing consumers with a vari-
ety of approaches to consider, enabling him to nd the model
which best suits his needs, but making apples-to-apples com-
parisons dicult. Therefore, the holisc nancial advisor should
make reasonable eorts to assist potenal clients to under-
stand what they will experience when working with the advisor.
4
And as many have noted, hourly compensaon rewards the advisor’s incompetence
(the research he must do to become conversant with the client’s need) and discredits
his experse (the great value he can add from his experience, but which takes lile
me to convey).
COMPARISON WITH
OTHER PLANNING
MODELS
THE PURCHASING DECISION
MODEL
A holisc nancial plan
considers every aspect of the
client’s nancial life with a
specic intenon that these
various aspects should func-
on harmoniously with one
another.
ADVANTAGES AND
DISADVANTAGES OF THE
HOLISTIC PLANNING
MODEL
Some advisors nd the holisc planning model more profes-
sionally fullling than the investment-focused model. It allows
them to be more deeply involved in their clients’ lives, so they
can add value and make a meaningful dierence on a wide
variety of subjects. (See sidebar, A Personally Rewarding
Pracce.) The model is well suited to advisors who see nan-
cial planning as a helping profession.
Many adherents to this model believe it will remain protable
long aer commodizaon makes the AUM investment man-
agement model less prevalent. While the rise of the robo-ad-
visor competes directly with AUM investment management,
holisc nancial planning inherently requires a more
human touch. The necessary ability to judge and assess situ-
aons suggests that automaon is an insucient replacement.
THE LIMITED PROJECT MODEL
Clients oen enter into a planning relaonship assuming they
can receive the answers to their specic concerns in a limit-
ed engagement. The client may assume that his situaon is
not complex and will not take a lot of me, and as a result is
resistant to considering the holisc plan. If the advisor charges
by the hour, one challenge is the unknown amount of me
necessary to properly provide soluons to the client. Unfore-
seen complexies oen add more me to the overall bill. The
client is le to wonder whether a higher fee was intended by
the planner all along.
4
Many clients do, in fact, have limited needs and may be well
served by a limited professional engagement, but are oen not
in the best posion to make this determinaon. The challenge
is not unlike that of the physician whose paent complains of a
pain in his foot. While to the paent it is clearly a foot prob-
lem, it takes the physician’s professional knowledge to idenfy
where the problem originates: in the paent’s foot (a fractured
bone), or spine (spinal stenosis), or diet (gout), or lifestyle
(running with inadequately protecve shoes), or immune sys-
tem (shingles). Likewise, it is the professional holisc nancial
advisor who is best able to diagnose the cause of the client’s
nancial pain, and the appropriate response.
6
A PERSONALLY REWARDING
PRACTICE
Penny Marchand, CFP®, EA
Penny Marchand’s professional life in nancial services started
out in a product-sales environment. “I was selling a lot more
product and generang a lot less revenue than my co-workers,
because I was focused on what was best for the client,” she
recalls.
“Investments are the easy part,” says Penny. Value for clients is
really added in helping them navigate life issues—marriage, new
careers, divorce, death of a loved one.
“If you are not understanding and engaging with your clients
about their life, then you are really not doing them a good ser-
vice.” The only way to do that, she says, is to be comprehensive.
Penny believes the term comprehensive works best for her prac-
ce. “My clients understand this more readily than they would if
I were to say we’re ‘holisc’ planners.”
Penny’s investment approach isn’t based on trying to beat the
market. Her aim is to discover what the client needs, when they
need it, and what’s the least amount of risk required to get the
job done.
Oen, the greatest value is not in investment advice. “We did
an insurance review saving thousands of dollars on coverage the
client didn’t need. Now that the couple was nancially indepen-
dent and nearly rered, they no longer needed their expensive
disability or life insurance policies, which they had connued to
pay just because they’d always had them. The property insur-
ance on their two old cars cost much more than it was worth
to them, but at the same me they had far too lile umbrella
coverage. Not only was the insurance on the client’s business
premises seriously inadequate, it was being paid out of personal
funds, not business funds—an oversight with income tax con-
sequences. So, this turned out to be an insurance and tax and
cash ow meeng. It was an incredible value-add their previous
investment advisor had missed.”
Most importantly, Penny loves what she does. “I go to sleep
at night with the sasfacon of knowing that I really helped
somebody that day. Maybe I helped them get rid of a fear about
rerement, or held their hand through the death of a spouse,
or gured out how to pay for their kid’s college. My goal is to
improve the quality of every client’s life.”
A comprehensive nancial plan can cost less than the
tradional AUM service with the acknowledgement of a simple
but paradigm-altering truth: constant asset management
usually adds lile value for the client. The persistent failure
of many rms to jusfy a 1% investment management fee
(without cherry-picking investment holding periods) is becom-
ing clearer to potenal clients, who are increasingly seeking
passive investment strategies. Examining investments, not
connuously but only once a quarter or once a year, leaves the
advisor substanal me to devote to other maers which, for
the typical client, can never be cured by any reasonable expec-
taon of investment return.
In addion, holisc nancial planning connues to have sig-
nicant markeng cachet. One of the authors has noted this
whenever she is asked her occupaon. When she replies, “I’m
a holisc nancial planner,” this is followed almost without
excepon with a queson such as, “What’s a holisc nancial
planner?” This invites a markeng conversaon explaining the
value the holisc nancial planner can add.
There are challenges to following a holisc planning model.
• The planner must be conversant with more details in more
subject areas than in other approaches.
• Some topics focus on issues that are deeply emoonal
rather than raonal or numerical. While many holisc nancial
planners maintain that the very point of nancial planning is
in fact emoonal, other advisors may be less comfortable with
these “touchy-feely” issues.
• Succession planning for the holisc pracce can be more dif-
cult, being less common, less uniform, and possibly requiring
more work for a successor.
• With no standard compensaon model for the holisc
nancial plan, many professionals nd it dicult to deter-
mine how they should charge. Idenfying an appropriate fee
structure takes more work than, for example, calculang what
percentage of assets managed a client should pay.
5
We expect these challenges to diminish as holisc models
become more widespread.
5
For one process to establish an appropriate fee structure, see Anderson, J., Lee, R.,
and Veres, B. (2016). “Fees at a Crossroads: Adopng an Advisory Fee Model that
Reects Your True Value.”
7
hps://www.napfa.org/membership, accessed August 7, 2017.
8
hps://www.xyplanningnetwork.com/
9
See Robinson, K. and Kuebler, J. (2016). “The Financial Planners’ Retainer: A Reec-
on of Real Value.”
7
planning, educaon funding, tax planning, cash ow and debt
management, rerement planning, investments and insurance.”
Furthermore, NAPFA requires its members to work “within
strict duciary standards.”
7
• The Alliance of Comprehensive Planners (ACP) and its pre-
decessor organizaons have been teaching advisors a proven
model of holisc planning since 1995. More recently, the XY
Planning Network
8
has seen extraordinary growth in a poron
of the profession reaching under-served clients in younger
demographics.
The business and service delivery models amenable to holisc
planning are increasing in availability and variety, and we expect
them to connue to do so for the foreseeable future.
We believe holisc nancial planning has many important
characteriscs that support its longevity. This approach pro-
vides signicant value-adds to the client, most importantly its
client-centric focus. As consumers become more educated and
aware of the value of a model that incorporates their whole
picture, we expect demand for a holisc approach to increase.
The industry has seen a great deal of discussion of the sustain-
ability of dierent fee models. While the authors are compen-
sated using retainers
9
(fees xed at the outset of the client
engagement), and see synergies between holisc planning and
retainer compensaon, this paper is not a discussion of the rel-
ave merits of dierent ways advisors can be paid. The holisc
approach can be carried out using a number of fee models, and
we expect that variety only to increase.
THE ADDED VALUE OF THE
HOLISTIC FINANCIAL PLAN
OBJECTIVITY
The purchasing decision model of nancial planning is not really
a plan at all. What the holisc nancial planner provides is a
coordinated strategy and the objecvity typically not found
when consulng specialized professionals. The advisor helps
the client to focus on their most important decisions and stop
worrying about maers that aren’t especially signicant to their
nancial well-being.
CONCLUSIONS
The authors see several inuences supporng the long-term
viability of the holisc nancial planning model.
The advent of the DOL duciary rule will push more clients
toward a model that has the duciary standard inherent in the
plan. The holisc nancial planner has a natural t with the -
duciary standard, which can be followed as an inherent aspect
of the nancial planning pracce. More importantly, potenal
clients are increasingly seeking the duciary standard; the
awareness of this opon will only strengthen duciary nan-
cial planning models, even if the DOL duciary rule proves
ephemeral.
Clients are beer informed about what they should expect
from a planning engagement, both in terms of cost and poten-
al conicts of interest. While no planning model is complete-
ly free of such conicts, the holisc model coupled with the
duciary standard can lend itself to the client-centric end of
the spectrum.
There is also an increasing consumer percepon that tradi-
onal investment management is becoming commodized.
6
The need to disnguish one’s planning approach from oth-
ers’ has been a markeng imperave for decades; the rise of
automated investment advice (whether it’s called “nancial
planning” or something else) has only increased the urgency
of this need.
Soluons to support the delivery of a holisc nancial plan are
very well established.
• The CERTIFIED FINANCIAL PLANNER™ (CFP®) curriculum
and designaon are focused on all the common elements of
a complete nancial plan. The comprehensive nature of the
designaon has increased in recent years; the CFP® educaon
program now includes the requirement of a capstone course
to integrate the learning from all the required subject-maer
coursework.
• In the fee-only realm, the Naonal Associaon of Personal
Financial Advisors (NAPFA) has long required its members to
demonstrate the ability to deliver a plan “that includes estate
THE FUTURE OF THE
HOLISTIC FINANCIAL
PLANNER
6
See, e.g., ibid.
8
With deeply detailed knowledge about every aspect of the
client’s life—not just investments, but cash ow, auto liability
coverage, itemized deducons, mortgage rates, and so much
more—the holisc nancial advisor is in a posion to guide
the client on virtually everything that impacts the client with
respect to their money.
This level of knowledge is harmonious with the duciary
standard. When the advisor knows more about the client’s
life, in addion to thorough comprehension of the client’s
investments (for example),
it becomes easier to provide
guidance truly in the best
interest of the client.
The far-reaching variety
of subjects covered may,
to some advisors, feel somewhat removed from their inter-
pretaon of nancial planning. (Financial planning pioneer
Bert Whitehead notes that when he started doing nancial
planning, “I thought I was a family lawyer.”) But a focus on the
client’s best interest will itself encourage greater knowledge of
the client’s circumstances.
VALUE ADDED
Those who pracce holiscally believe that delivery of a
comprehensive experience is the way the client receives the
greatest value-add from the nancial planning process. While
various compensaon models can work, many nd that a
retainer gives the client the assurance they won’t have to pay
addional fees when seeking guidance to address unforeseen
challenges.
Similarly, many planners have noted that their comprehensive
perspecves have oen prevented clients from encounter-
ing nancial issues that had yet to surface, frequently adding
value far greater than their fees. The client may believe they
primarily need investment advice. But the planner’s expert
eye may reveal the need for tax planning, an insurance review,
cash ow guidance, or coordinaon of other elements of the
nancial plan. It is the comprehensiveness of the approach
that oen adds the greatest value.
Such benets were noted by a planner who explained the
value of her holisc approach:
If you see that they are spending $4000 [per] year on whole
life insurance, you can immediately start working on replac-
ing that with lower cost term, for example. Or, encouraging
them to shop around for auto insurance when they have a
teen driver and their policies are loaded with other unnec-
essary and expensive add-ons. Or, they are paying extra on
What the holisc
nancial planner brings
to the experience is a
coordinated strategy
and objecvity.
11
For example, Kathleen M. Rehl, PhD, CFP®, CeFT®, in her book Moving Forward on
Your Own: A Financial Guidebook for Widows, addresses both nancial and non-nan-
cial inuences in the lives of women whose life partners have died.
their mortgage which you can redirect to rerement savings.
Or renancing their mortgage to a lower rate; consolidat-
ing high interest student loans, etc. Or, planng the seeds
for a move to a more aordable home. Or redirecng their
savings to their [401(k)] where they will get a match and tax
deferral when they have been “invesng” in a taxable ac-
count or Roth sold to them by their local brokerage rep who
pooh-pooh[ed] saving in tax-deferred vehicles without even
knowing what tax bracket they were in. Oen, your advice
and help in making those type[s] of changes will save them
much more than they can achieve by cung down on lunch-
es out, or [coeehouse] visits (although every lile bit helps).
That’s the beauty of the … comprehensive approach—we see
the whole picture on the puzzle box while they are immersed
in the individual pieces. And, we have the experse and
knowledge to help them nd fairly painless soluons [by]
rearranging and reallocang.
10
Purchasing-decision-based sources for consumers miss these
opportunies, producing at best an uncoordinated nancial
plan, and somemes even compeng nancial recommenda-
ons.
The value added by planning holiscally requires empathy not
necessarily needed in other models. While holisc planning re-
quires skills like investment acumen and understanding of cash
ow, it also frequently requires abilies that would be found
in disciplines like social work and counseling. Some clients, for
example, turn to their advisors in mes of grief. As one advisor
observed, the holisc nancial planner oen gets to know a
great deal of the client’s personal story, not just the story of
their nances.
Money is just the eld on which many other triumphs and
disappointments, conicts and resoluons are played out. It is
oen an indirect path to get from where the client is today to
where he wants to be. The nancial elements of this journey
may be clear; the non-nancial elements may help to inform
the holisc nancial planner about whether the client will be
willing even to embark on the journey.
Many planners have long recognized the value of the non--
nancial in the planning process. It is reected in the books and
arcles they write
11
, the plans they create, even in the names
10
Folk, K., ACPConnect Member2Member discussion forum, July 1, 2017.
9
13
Today’s investor can build a diversied porolio using about three index ETFs, none
of which costs more than 0.11% per year to own and only about ve dollars each to
trade.
they choose for their pracces.
12
As one of the authors has
noted, “I’m not a numbers guy. I’m a peace and fulllment guy.
I’m a love and contentment and serenity guy. I happen to work
in a world of numbers.”
SUSTAINABILITY OF THE
HOLISTIC APPROACH
The holisc nancial planning approach is high-touch, and
can be more expensive and challenging to execute than asset
management. The investment-management-only model faces
sustainability challenges as computaonal models replace
ever-increasing slices of experse that previously required
professional judgment, and as the consumer becomes beer
educated about costs.
13
Another challenge to the sustainability of the investment-
mangement-only model appeared with the advent of the
Department of Labor’s duciary rule. This prompted some
notable providers to consider exing the 401(k) rollover-to-
IRA space, which some have seen as a validaon of long-held
suspicions that their processes were designed to advance their
protability more than the client’s interest.
These long-exisng models of delivering nancial advice are
unlikely to disappear enrely. Sll, the holisc nancial planner
need not rely on quesonable recommendaons or outright
misdeeds of others in the industry to demonstrate her value.
She need only eecvely communicate her role in pulling
together all aspects of the client’s nancial life so that its many
facets won’t undermine each other. By providing independent
expert advice, she orchestrates the enrety of the client’s
nancial life.
The sustainability of the holisc nancial planning process is
founded upon the signicant disncon that it is not primar-
ily about invesng. It is about invesng to the extent that the
client and advisor jointly believe that invesng is what most
merits their aenon. If those energies are beer directed
idenfying sustainable cash ow, nding the right college
planner, or determining whether the client should renance
his credit card into a home equity loan, then investments will
wait for their appropriate place in the lengthy list of a typical
household’s nancial priories. We believe this creates the
greatest value-add for the client, and most accurately reects
the client’s own priories in the whole of his nancial life.
12
Linda Y. Leitz, PhD, CFP®, EA, CDFA and Jane M. Young, CFP®, EA, MBA recognized
this when they changed the name of their pracce to It’s Not Just Money, Inc.—A
Financial Planning Firm and later when they established the separate rms of Peace of
Mind Financial Planning, Inc. and More Than Your Money, Inc.
Kelly Adams, CFP®, EA
Kelly is the owner and senior
planner of Harbor Light Planning in
Novi, Michigan. Since the founding
of her rm in 2004, its planners
have been holisc, fee-only and
duciary with a goal of walking side by side with
each client as they achieve their goals and dreams.
Kelly holds a bachelor’s degree from Michigan State
University’s College of Business. She is a CERTIFIED
FINANCIAL PLANNER™ cercant, IRS Enrolled
Agent, and NAPFA-Registered Financial Advisor.
Prior to founding her rm, Kelly was a senior plan-
ner at Cambridge Connecon, and held tax prepa-
raon and nancial management posions at var-
ious companies. Kelly joined what was to become
the Alliance of Comprehensive Planners (ACP) in
1998. She has since trained many advisors in ACP’s
holisc nancial planning philosophy and method-
ology, and has served the organizaon in a wide
variety of roles involving ACP’s training program,
annual conferences, and new member mentorship
to name just a few. Kelly currently serves on ACP’s
Board of Directors.
When Kelly isn’t at work, you can nd her in the
woods, kayaking a river, or teaching the younger
generaon to swim.
ABOUT THE AUTHORS
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Ken Robinson, JD, CFP®
Ken is the owner and president
of Praccal Financial Planning Inc.
in Cleveland, Ohio. He earned a
bachelor’s degree from Cornell
University and a JD from the Case
Western Reserve University School of Law. He is a
CERTIFIED FINANCIAL PLANNER™ cercant and
NAPFA-Registered Financial Advisor.
Prior to founding his firm, Ken practiced law and
worked as a property/casualty risk manager for
local government. He joined what was to become
Alliance of Comprehensive Planners (ACP) in
2000 and since that time has used the retainer
model to serve a variety of clients in widely
differing life circumstances, including
professionals in the public sector (federal, state,
and local), independent women, college
professors, and medical professionals.
Ken serves on the Board of the Alliance of Com-
prehensive Planners and on NAPFA’s Ethics
Committee. He is the author of several books
and e-books on personal finance, including Don’t
Make a Budget: Why It’s So Hard to Save Money
and What to Do About It. A member of National
Speakers Association, Ken is the author and pre-
senter of the continuing legal education program
Financial Planning for Lawyers. His writing on
personal finance has appeared in Cleveland’s The
Plain Dealer and in the journal Science, and he is
the co-author of the white paper, "The Financial
Planners' Retainer: A Reflection of Real Value."
11
www.acplanners.org
Copyright © 2017 by Alliance of Comprehensive Planners, Inc. All rights reserved.
ABOUT ACP
The Alliance of Comprehensive Planners (ACP) is the
community of tax-focused nancial planners operang
under the retainer model.
ACP has been helping its members build successful pracces since 1995. ACP trains its
members in the ACP System™, an extensive program based on the highest ethical standards
and most innovave pracces in the nancial planning industry. As fee-only duciary nancial
planners using the retainer model of compensaon, ACP members provide their clients nancial
plans that are comprehensive, considering not only investments but also the tax consequences re-
lated to investment and other nancial strategies. ACP member advisors opmize the use of assets for
tax eciency, growth, and security to support their clients’ goals and maintain their CFP® or CPA/PFS (or
equivalent) designaon and/or licenses. Most of all, as a not-for-prot organizaon, members benet
from a vibrant naonwide community of mutually supporve, like-minded colleagues dedicated to put-
ng their clients’ interests rst.
For more informaon, visit www.acplanners.org.
SPECIAL THANK YOU
The wring of this white paper was intended to supplement the increasing frequency of conversaons
around the diering pracce models that nancial planners use to advise clients. While we cited any
sources we drew from directly, we want to acknowledge the many thought leaders, industry speakers,
and authors who have discussed many of these same ideas. The authors would like to give a special
thank you to ACP member Penny Marchand, CFP®, EA, the principal of Cambridge Financial Group, the
Alliance of Comprehensive Planners (ACP) (formerly the Alliance of Cambridge Advisors), its founder Bert
Whitehead, and ACP’s many volunteers and members for pioneering and advancing many of the ideas
we have presented in this paper.
