Good financial planning is about doing the small things consistently over time. Most of us have the question of whether “Am I on track? Will I have enough?” This requires reflection on both what we want to achieve for ourselves and what we want to leave as a legacy for children or other family members.
One of the under-appreciated benefits of working with a financial advisor is working together to understand and articulate our objectives. With that in mind, they would be able to discuss how much the individual or couple wants to keep spending and how this will impact capital. This is where financial projections can come in handy.
Advisers often use simple financial projections to show the impact of different spending levels to illustrate the trade-offs. But while capital can be a big issue, financial advice is not always just about achieving the optimal financial outcome when people are involved.
Another benefit that we may not realise is the peace of mind of having a trusted adviser who understands and coordinates our financial world and can assist our loved ones and us if anything happens to us.
This is especially important in intergenerational wealth transfer; it’s common to find someone who has significant wealth and complex structures but has not updated their will or considered how control of that wealth will be transitioned to the next generation.
There is an important role for financial advisors, accountants, and estate planners to work together in this area.
