Question: Several financial services companies offer to offer proprietary financial plans to my employees. Should I take these offers?
A: Many employers are proactively considering additional value-added benefits for their employees, including financial planning services. Offering these ancillary benefits can be a good employee retention strategy as it shows that you are interested in their financial well-being.
However, before you sign an agreement with one of these financial services companies that will provide your customers, your employees with a financial plan, it is essential to understand what financial planning IS and is NOT.
Financial planning is not just investment planning.
While the adage “killing two birds with one stone” may apply in some circumstances, it doesn’t apply when you’re trying to offer a financial planning benefit to your employees. Generally, the “discount finance company” offers nothing more than a portfolio review, insurance analysis or retirement assessment. While partially valuable in their own right, these standalone services and many others like them are only part of financial planning.
Also, in some cases the motive of discount companies is to sell products to earn commissions. For companies to market the stand-alone product or service as if it constituted the whole is misleading.
Consider the entire financial situation.
It is important to distinguish between the individual and partial elements of financial planning and the value of true holistic planning. Without considering an individual’s entire financial situation, recommendations about specific elements of planning can be short-sighted and questionable in the long term.
Let’s talk about holistic financial planning. It includes comprehensive, inclusive and thoughtful considerations of investments, insurance, cash flow/budgeting, taxes, education funding, retirement, estate and other areas that are personally relevant and important to an individual and their loved ones.
It is important to approach the financial planning process as a comprehensive individualized strategy.
There is a lot to consider when it comes to financial planning considerations. Each plan must be created based on the unique situations and circumstances of the people involved. The right decisions will be those based on many factors. It involves open, honest and often vulnerable conversations about a financial plan with one’s spouse, in some cases children and other loved ones, as well as your trusted advisors to ensure that decisions are thoroughly considered and that the ‘individual be well educated about the possible short. -long-term and long-term risk of each strategy.
The best financial planning is comprehensive.
The best financial planning occurs when the advisor takes a holistic approach to the plan and incorporates their client’s goals and lifestyle. If you choose a financial advisor who acts as a client fiduciary, such as a certified financial planner, you can be sure that they are providing your employees with a true benefit.
Crystal Faulkner is a Cincinnati market leader with MCM CPAs & Advisors, a CPA and advisory firm that provides expert guidance and end-to-end thinking for today’s public and private companies, large and small, not-for-profit , governmental and private entities. Tom Cooney is at Wealth Dimensions, an investment advisory firm. For additional information, call 513-768-6796 or visit online at mcmcpa.com. You can hear Tom and Crystal daily on WMKV and WLHS on “BusinessWise,” a morning and afternoon radio show that profiles successful people, companies, organizations and issues throughout our region.