Let me show you the tools of Holistic Financial Planning and apply them to a Financial Intermediary as a client.
The Master Framework is called the GAME Plan; Goals and Actions Means Execution. There are planning frameworks within the framework. For simplicity, we joined the conversation at M for Means. Here, we have the adviser’s Goals, which is their favourite future with a price tag attached (creating a lifetime liability forecast). For Actions, we have a Project Plan, a step-by-step set of actions to overcome obstacles and achieve goals. We have a plan for life. But, we don’t yet have a plan for the financial architecture that needs to be implemented to support it.
Next, we run a base plan and a lifetime cash flow forecast under Means. This plan shows year by year whether income exceeds expenditure without outliving capital. We can stress-test the model with various assumptions.
The financial adviser is either looking at a sea of red or a sea of blue. They either: 1) Have not enough (red), or 2) Too much (blue).
For the wealthiest 10%, the sea is blue. For everyone else, we see red.
Financial advice thresholds mean that financial advisers generally select blue clients and help them save money they have already made. The red clients are underserved. A few advisers might attempt to sell long-term savings products to the Reds to turn the what-if blue. However, product sales are not the optimal strategy for the stretched middle.
What if you, the adviser, turn up an underserved red? What then?
This scenario is where the holistic financial planner turns on their asset alchemy.
Our GAME plans create wealth most optimally.
At this point, we know the adviser’s values and what is important to them. We can help the adviser live according to those values, that is, to live with integrity and conscientious life, often working to make the world a better place in their way.
We also know their talents. We will use those talents to serve others and give the adviser life purpose.
We use a 4P framework: Purpose, People, Planet, and Profit.
Purpose (What we are good at): We create a mission statement for you. Using your talents, we create a personal SWOT analysis of strengths, weaknesses, opportunities, and threats.
Typically, the financial adviser will have the following talents: 1) Financial planning knowledge, 2) Good with people, and 3) Life experience.
These are intangible assets, called productive assets. Assets are things we own that can create a future economic benefit.
Our most valuable assets are not our house or our pension; it is us! Considering our productive assets, our market-to-book value is immense. That is the ratio of our total wealth to our tangible wealth. It is off the scale.
We create wealth, not with products, by identifying productive assets, leveraging entrepreneurial opportunities, and creating sustainable livelihoods. By that, we mean income.
We optimise wealth creation by using ALL our talents!
Suppose we are in the top 10% with knowledge, top 10% with people, and top 10% with life skills. When we combine our talents, we are 1 in 1,000. We have a USP, a unique selling proposition. We have little competition and a differential advantage.
If in our next chapter, we just used one of these skills, for example, as a life coach, we swim in red waters and don’t stand out. We struggle economically in a highly competitive environment.
In livelihood management, we create diverse income streams. We need income each year to match the cash flow liability. We need active income for our health life and passive income for our remaining life. Passive income can come from savings, but it is not the only source. Instead of exchanging our time for money, we can exchange our know-how. That also creates passive income streams.
There are two other intangible asset classes we consider. Vitality assets to give our active income stream longevity (and being active in retirement is scientifically proven to extend health life and longevity). The other is transformational assets, such as being well travelled, which make us resilient in the face of change, thus reducing the risk of income streams faltering.
Please read our other blogs to learn more about strategic intangible asset allocation for wealth, health, and happiness.
People (What we love to do): We create compelling customer propositions with positive societal impact. We use pains and gains. According to studies, a significant pain for financial advisers is the impact regulations are having on their mental health. Doing what we love, therefore, requires that we retire from regulation. But if we love financial planning for our clients, how do we do that? The answer is non-intermediating financial planning.
Planet (What the world needs): The red cash flows need more wealth, a combination of lifelong income streams and savings pots. What the blue cash flows need is estate planning. Both of these activities are generic financial planning advice and outside the scope of the FCA perimeter. We also need sustainable strategies, as every pound earned, spent, or saved is a decisive vote for the change we want to see.
Profit (What the world will pay you for): According to the United Nations, 60% of the world’s population lives in poverty. People value and pay for more blue cash flow reports to support their well-being visions. As a financial adviser, you can retire from regulated without retiring from financial planning. Retire to work that feels like work you never want to retire from. With blue cash flow, you can afford to live your favourite future, helping others with your skills and knowledge to live theirs.
Our approach at the Academy of Life Planning enables financial advisers to retire from regulated environments without stepping away from the essence of financial planning. By embracing non-intermediating financial planning, you engage in work that energises rather than exhausts, crafting a career that feels less like a job and more like a calling.
Join us in redefining financial planning to create not just wealth, but a holistic well-being that aligns with your life’s purposes, champions social responsibility, and delivers lasting happiness. Visit our blog posts to learn more about strategic intangible asset allocation for a wealthier, healthier, and happier life.
This visionary shift empowers you to transcend traditional boundaries, offering a blueprint for a fulfilling future that harmoniously blends professional success with profound personal satisfaction.
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