Quick story about Anna (37), an executive in a private equity-backed healthcare consulting firm, and Luke (43), a commercial banker at one of the largest banks in the country.
They live in a picturesque modern farmhouse with two beautiful children along with a golden-doodle, Hunter. Their family picture would fit well on the cover of Southern Living.
Both Anna and Luke have master’s degrees along with additional certifications. They are elite level performers in almost all aspects of life.
Prior to us meeting, they shared that they worked with a top-notch financial planner who provided wonderful instruction and next steps in a financial planning only arrangement.
If you aren’t familiar, a financial planning only arrangement works something like this: You pay for financial planning (advice & guidance) and it’s on you to execute on it.
They explained that they received terrific instruction from their planner on a regular basis:
- Increase your Roth 401k contributions by 1%, as annual contribution limits have increased
- Update your 401k holdings and future contributions:
- Reallocate 100% of your Target Date Fund holding and purchase 80% Total Stock Market Index Fund and 20% International Stock Market Index Fund, adjust future contributions to match
- Make sure to invest the funds in your Health Savings Account (“HSA”) as they are still in cash
- Sell [“XYZ”] stock in your brokerage account, lock-in the loss and purchase a Total Stock Market Index Fund
Based on my estimation they were receiving wise counsel. However, they admitted that they never implemented any of the advice, passing on many years of opportunity.
Imagine going to the dentist because you have a painful toothache. The dentist diagnoses that you have several cavities and require fillings. However, instead of scheduling your follow-up, you choose to kick the can and ignore the pain.
Worse, imagine ignoring this diagnosis for years.
Anna and Luke are busy. They work demanding jobs, do they very best they can with their kids, are running around town for activities, on and on…
Their heart and intent were in the right place, they knew they needed the financial guidance, however they just didn’t make the time (or have the time) to execute on any of it.
Fast-forward, they came to us in early 2024 (February) and word for word said: “We need someone to take this over, enough’s enough, we just don’t have the capacity for this.”
We were excited to have them as new clients and eager to help them finally execute their financial plan.
Here’s how it went down in short order:
- On our initial Zoom call together, we updated allocations to their retirement plans, 529 accounts, and ensured the HAS cash was properly invested
- We found that one of the retirement plans did not list a beneficiary and the other listed a deceased parent. Both immediately updated
- We began actively managing the investments within their brokerage account and Roth IRA’s
- We sold various investments that were right for tax-loss harvesting, and reallocated what was left in those investments
A financial plan without implementation means nothing. Apropos for this time of year, a diet and exercise program without action is really nothing more than fodder.
An ongoing financial planning relationship with on-going monitoring, new ideas, and most importantly, execution, is everything!
We’ve been thrilled to be working with Anna and Luke for about a year and they’ve been vocal about their appreciation in our relationship and that we’ve removed the anxiety and overwhelm of having a “to-do list” that was hanging over their head and never implemented.
If you or someone you’re close to is a high-achieving professional that could use help aligning their finances and establishing a financial plan, please reach out to us, we’re accepting new clients and eager to help.
Cheers, Nic
This is a hypothetical situation based on real life examples. Names and circumstances have been changed. The opinions voiced in this material are for general information only and are not intended to provide specific individualized investment, tax or legal advice for any individual. We suggest that you discuss your specific situation with a qualified, legal advisor and financial advisor.
