3 Critical Pieces of a Financial Plan

Marshall Rathmell |

BCR® believes strongly that the key to reaching your financial goals lies in putting together a financial plan before building a good investment portfolio.  A good investment portfolio is the backbone that supports a financial plan but too many people in our industry and the public focus on the investments first.


To determine if you have a good financial plan there are three high-level things that you should make sure you have addressed:


  1. It includes a full picture of who you are.  We call this a client profile, but you can call it whatever you want.  A full picture allows everyone involved in your financial plan to be on the same page of what is important to you, what you are trying to accomplish and what you have to accomplish it.  We break it down into:


  • Values
  • Goals
  • Relationships
  • Advisors
  • Income
  • Expenses
  • Assets
  • Process
  • Interests


  1. It lays out the actions/recommendations needed to get from where you are to where you want to be.  I see too many financial plans that are beautifully laid out in bulky binders that analyze areas of someone’s financial picture, but they struggle to determine which actions to take and in what order to complete each item.  If you can’t verbalize the things you can work on and which ones you are working on now, then I don’t understand how you are going to have substantially positive progress.


  1. It details who is responsible for the actions and provides accountability over time for them to accomplish it.  A financial plan is a living, breathing document.  I have yet to see the person that changes everything in their financial situation overnight and then is set for the rest of their life.  It is not uncommon for someone to tell us that they had someone create a financial plan for them years ago but they haven’t spoken to that person since the plan was delivered and they purchased some of the recommended investment products.  When I ask what they have achieved with that plan the answer is usually “I made a change or two, but I don’t think anything has really changed with our trajectory.  Plus we are not the same people that he/she created the plan for because of life changes”.  Whether meeting with your spouse or a professional, at the end of a meeting everyone involved should know who is going to do what and when you will be getting back together or following up to make sure the tasks are completed.


There are a lot of good options to have a financial plan created.  They can include robust software programs, binders and a mix of other tools but if they don’t incorporate the three items I suggest above, then you diminish their effectiveness.


-Marshall Rathmell-