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A Financial plan is critical - whether you know it or not!

An advisor needs a financial plan - KYC is a requirement

Having a financial plan (retirement plan) has many uses and benefits which most people are not aware of. A financial plan must have a strong tax component as part its role in planning and investing for retirement. Yes, it does take a bit of time initially for an advisor to prepare a financial plan. However, it is not an optional approach for an advisor: it is part of a requirement for an advisor to ‘know your client (KYC)”. If your advisor does not insist on a financial plan perhaps look for a new one.


A financial plan serves many purposes:

a) estate planning

b) ensures sufficient annual cash will be available for both an employee and their spouse

c) used to develop a long-term tax strategy to minimize the overall tax payable

d) determines an appropriate level of investment risk i.e., an annual target investment return

e) used to develop and implement long and short-term investment strategies

f) essential in developing a drawdown strategy during retirement

g) a “financial will’ for your estate and/or a spouse

h) an estimate of where you are financially at any point in time reducing the unknown about retirement


Many people believe they don’t need a formal and up-to- date financial plan - they have one in the back of their mind. Really? Is this possible given the complexity of the tax aspects by themselves, or in determining an appropriate level of risk to take when investing?


Things are also change all the time and a plan in the ‘back of your mind’ has to be able to redo the plan. Unless you are a Mensa candidate, not having a financial plan is more likely an example of self-delusion, egotism, laziness, or an unwilling to face up to something that is technically complex and uncomfortable to address.

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