By Thomas Mullooly, originally published at Mullooly Asset Management.
One-time financial plan is a myth
Why “One-Time Plans” Don’t Work (and What to Do Instead)
This video explains why a one-time financial plan is essentially just a snapshot or “checkup” with little lasting value.
While others may disagree, at Mullooly Asset Management we believe financial planning is an ongoing process.
Especially since we have seen circumstances change constantly.
Tom shares early experiences offering one-time meetings where clients later made major (finance related) decisions. These same folks then returned needing a “full refresh.” This effectively became a brand-new case.
As a firm, we’ve have concluded one-time plans are not in clients’ best interests due to limited implementation, lack of follow-up, and frequent pivots as life changes. However, we also acknowledge an entire industry stands, exists, on offering one-time financial plans as a practice. We do not endorse this.
Instead, our approach involves building and stress-testing a plan, walking clients through it, and only then allocating assets, with fees based on assets under management.
Our core message: it’s not luck, it’s planning.
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Transcript for One-time financial plan is a myth
We have meetings with potential new clients, and we hear:
“My investments are all set, I only want a one-time financial plan.”
“My investment guy ONLY does investments, that’s all set.”
“I’m really only looking for a one-time financial plan at this stage.”
If a one-time financial plan is what you’re seeking…… you may want to rethink this approach.
And – we are NOT going to be a match for each other.
Financial Planning is an ongoing process.
Financial Planning is NOT a one-time event.
Very early on in our history, I had a few “one-time financial planning” meetings…
Really, these were just “financial check-ups” with no fiduciary obligation attached.
That’s what a one-time financial plan really is…
It’s just a check-up.
I heard things like “Oh…… after we met, we decided….”
….we would be taking money from my 401k earlier than expected…
…..we filed early for SS at age 62…
…..our expenses turned out to be much more than we expected…
And – folks came back in the future, and wanted a new “one-time financial plan” – a refresh.
These essentially were brand new cases.
So much had changed.
We needed to start all over again.
You could almost consider these as new cases, since so much was different.
I mean, the names were the same – but with a fresh set of circumstances.
At that point, the decision was made we are not offering “one-time financial plan” any more.
One-time financial plan — NOT in the client’s best interests.
When you get a one-time financial plan, you’re going to pay a fee — for a snapshot in time.
And the reality is, with a one-time financial plan, or financial check-up, there – very often – is NO follow-up.
What we do is:
We build a plan.
We spend a lot of time going back & forth until the math all makes sense.
Then we project it forward, adding inflated math,
then stress-testing the numbers.
We walk through the plan and explain it to you.
Then we allocate your assets, BASED on that plan.
Some assets – for the record – should always remain in a bank account.
We charge a fee for the assets under our management.
And take some time to see our fees, they’re posted plain-as-day on our website.
In my opinion, one-time financial plan / consultations do not carry much value.
It is simply a “check-up” or a “snapshot” of one point in time.
Things are going to be different tomorrow.
They always are.
And, human nature being what it is….
what we’ve heard from other planners:
1. People often won’t implement what’s been recommended (“you should eat more vegetables”).
2. There’s no follow-up….. no follow-through.
3. People will take their snapshot and decide to “pivot” “we decided we would do this now…”
4. Circumstances change – they change all the time.
Planning is an ongoing process, it is NOT a one-time event.
We are just not believers in a one-time financial plan having much long-lasting value.
Some people will tell you that success in life is “just a matter of luck.”
It’s NOT luck.
It comes down to good planning.
A phrase I began saying 25 years ago goes like this:
“it’s not luck, it’s planning.”
That phrase is splattered all over our website……
…..and in all of our marketing.
Because we believe in it.
For more on that, watch this video…. next…….
Thomas Mullooly writes at Mullooly Asset Management. Read this article on their site.
