"Comprehensive" financial plans are MapQuest. Integrated financial planning is your GPS.

Ah, financial planning – the science of crunching data to find a series of outcomes, the art of making sense of it, and the quest to make it profitable. But the reality is, most financial plans are brittle and naïve, and don't create lasting value for people trying to navigate their financial lives.

‍In reviewing hundreds of client "comprehensive plans" put together by various advisors across the industry,  90%+ of traditional financial plans area low-value, do-nothing commodity, versus a helpful, value-add service.

Many advisors focus on selling a static "comprehensive financial plan," that maps out your entire financial future based on a slew of assumptions. It sounds helpful, but these plans are just one life change away from being worth the paper it’s been printed on (before inflation). These plans are usually less about getting you there efficiently, and more about selling you stuff and billing you by the hour.

A smarter approach is to create an overall financial strategy, that takes a simple financial plan and integrates it with a tailored investment plan and active investment management.

A helpful way to think about it:

Comprehensive financial plans are like a MapQuest printout that is useless once the expected route changes at all.
‍Integrated financial planning is like GPS. It locks in the destination but lets you adapt to road closures, avoid traffic jams, and decide what to do about that upcoming toll road.

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Here’s why that matters to you.

An hourly-billed, one-off financial plan does not incentivize creating the most efficient, clear product for the person. No matter how simple or complicated a plan may need to be, many advisors feel the need to justify the expense and create a laminated book designed to cure even the worst insomnia. It's inevitably filled with dozens of charts, enough “Monte Carlo simulations” to make you hate James Bond,  and the same, dour meeting to try and explain it. All that takes time – a lot of time – and a "plan client" is paying for time.

And when (not if) the excrement hits the fan, it hits "the plan." A black swan market event (Great Recession, Dot Com Bubble, the brief COVID-19 crash, etc), a layoff, a long-term injury, a major financial transactions like real estate…all of these break "the plan." Static plans can't see these things coming, and their value becomes quick kindling for your backyard firepit.

As Mike Tyson says, everyone has a plan — until they’re punched in the face.

The reality is, the world is always punching. A transactional financial planner of course knows this, and you can expect a quarterly or annual follow-up call for the necessary “update” that costs – you guessed it – the same hourly rate to construct.

No one needs a stack of paper MapQuest directions. The GPS to your goals is integrated financial planning.

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Rinse, wash, repeat.

Smart wealth management takes a flexible, goals-based approach to navigate to a financial destination.

A good, fee-based advisor approaches financial planning as a value-add service, and will integrate your plan with your investments. This enables you to make progress but pragmatically course-correct in real-time as circumstances change. It's also a more holistic approach, where an advisor can simultaneously adjusting your investment portfolio, and give you sound advice that comes from complete knowledge of your financial picture. 

Another good way to think about financial planning is like a commercial pilot's flight plan - it's just a best-guess based on forecasts. But the second that plane is about to fly into an expected storm, or nasty headwinds are slowing down the trip, the trained pilot knows when to toss that plan and start making smart adjustments. That's what keeps everyone safe and on-course.

The value of an advisor is in their ability to be a smart navigator in your financial journey, not the quality "the plan" they deliver.

A value-add financial advisor will know when to ditch "the plan" when it stops lining up with reality, and have the skills and expertise to deftly navigate your wealth through unpredicted storms. 

My advice? Avoid throwing money at a shiny, one-off “comprehensive financial plan" that doesn't adapt in real time to your circumstances and needs. Be wary of the advisor selling these plans as THE solution. At best, they're unintentionally instilling  dangerously high confidence about navigating around wild and uncooperative life can be. At worst, they’re trying to make a quick buck from you every few months. 

Instead, find a smart advisor who will help you prepare for and embrace the chaos, will notice and ditch outdated assumptions quickly, and will keep you truly prepared for anything.