Financial Plan Summary – Best Practices Part I

financial plan summary - best practices part i

For many financial advisors, one of the biggest challenges they face is the time it takes to provide comprehensive financial planning. We’ve all been there, right? You’ve put in the hard work, built various financial scenarios, and have all the results ready for your client. But now, the daunting task of figuring out how to present this complex information to your client in a way that’s clear and easy for them to grasp.

That’s where NovaTrak comes in! Our main goal is to make this step a breeze for you. No more reinventing the wheel every time creating a Word or Excel document from scratch. Today, we want to dive into the financial plan summary and share some valuable tips to help you not only save time but also enhance your client’s overall experience. So, let’s get started!

The Financial Plan Summary has 8 different sections:

Overall Plan Health
Budget Breakdown
Cash Flow Planning
Retirement Income Planning
Investment Strategy
Risk Management
Tax Planning
Estate Planning

overall plan health

Each of these sections operates independently, giving you the flexibility to choose which areas you want to work on. Only the sections you select will appear in the final client presentation. Now, let’s dive deeper into the best practices for completing each section. For efficiency, make sure to take advantage of the “Apply Base Facts” button. This nifty feature lets you replicate the base scenario, saving you time as you only need to update a few amounts in your additional scenarios.

Lastly, don’t forget to tick the “Hide Empty Scenarios” box. This ensures there are no blank fields in your client’s presentation, providing a polished and professional look. These little tips can go a long way in streamlining your financial planning process!

budget breakdown

The Budget Breakdown section offers you a valuable opportunity to discuss your client’s expenses and suggest potential changes to those high-spending categories, helping them free up some extra cash to achieve their financial goals. When working on the income section, it’s worth noting that we use Net Income figures for accuracy, so please keep that in mind.

Once you’re on this page, you’ll find three distinct templates to choose from, allowing you to tailor your approach to each individual client’s needs:

Default Template: This template is divided into three sections and works well for clients with relatively few expenses. It’s a speedy option for building their budget.

Summary Template: In this template, major and common expense categories are already set up for you. You’ll only need to input the amounts for each category, making it a convenient choice.

Detailed Template: For clients who want an in-depth view and recommendations for every single expense and savings category. In other words, the Detailed Template provides a comprehensive breakdown.

One crucial point to remember: the “Annual Bonus/Commission/Distribution” amount isn’t factored into your “What’s Left Amount” for monthly living expenses. Instead, it appears in the Cash Flow Planning section of the client presentation as “Amount Available for Goals.” This ensures clarity in your financial planning presentation.

cash flow planning

Now, you might be wondering how those tracking bars are generated. As you input data for your client’s liabilities, our software quietly crunches the numbers, calculating liability payments in the background. This calculation then reflects in the “Next Year’s Target balance,” showing the amount they should aim to pay in the coming year. In the goal savings section, you can add those significant financial goals and provide recommendations on how to achieve them. Remember the “Amount Available for Goals”? This is where you can guide your clients on how to wisely utilize that extra discretionary income to reach their goals. Another handy feature you’ll find throughout the software is the Action Plan builder. Keep an eye out for the checkmark icon in every recommendation box. When clicked, it adds the recommendation to the OneTrak, making it easier than ever to track and implement your financial advice. It’s all about streamlining the planning process for you and delivering the best outcomes for your clients!

retirement income planning

This section serves as a fantastic tool to help your clients get a clear picture of where their income during retirement will be sourced. It’s worth noting that our focus here is on the upcoming year of retirement. If your client hasn’t retired yet, you’ll use the numbers for their first year of retirement or semi-retirement. To ensure consistency with your planning analysis report, we present all amounts in future dollars.

Lastly, let’s talk about the income gap funding section. Here, you have the opportunity to provide detailed recommendations on where it’s best for your client to draw income from their investment accounts. Your suggestions are tailored to their specific expenses, tax bracket, and the type of retirement accounts they have. This level of detail ensures your clients make informed decisions about their retirement income sources, helping them achieve a more secure financial future.