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What Is Financial Planning?

This question has different answers depending on who you ask. 

I’ve met advisors who feel that they’re covering financial planning by simply managing investments and doing some projections. I’ve also met advisors who take a much deeper approach, like I do.

For the purposes of this post, we’re going to assume that we’re talking about the holistic, ongoing planning that I do for most of the people I work with.

The Process:

“What does the process look like?” I’m glad you ask, but beware: this is going to seem like a lot. I do my best to decrease friction throughout the process, but it is work. 

Information Collection: The first step in financial planning is to collect information, which is typically collaborative. What type of information, you ask? ALL OF IT!

Just kidding. Kind of. Below is a list that covers some of the biggest stuff:

  • Familial information (partner, kids, other dependents)

  • Career information

  • What you’re looking to accomplish

  • Investment statements

  • Latest tax return

  • Insurance policies (life & disability, sometimes others)

  • Debt information (balances, interest rates, minimum payments, current payments if paying extra)

  • Other assets (home, other real estate, etc.)

  • Employee benefits package

If I’m going to be doing planning for people, this is kind of the minimum amount of information I need to get started. When going through the information collection process, there are almost always more specific questions that come up.

Analysis: The next step is for me to dig into the information, analyze it, and come up with some draft recommendations. They’re draft recommendations because nothing is final until we determine (together) what makes the most sense to take action on for your specific situation.

Discuss Recommendations: Step three is to get together, discuss some of my findings and talk about what should be implemented. This part is very collaborative. There are always some recommendations I feel more strongly about than others, but because I’m a fee-only advisor, none of my recommendations change how I’m paid - you can trust that the advice is objective.

Implementation: Once we determine the path to take, we have to implement the strategies we’ve discussed. Some things, like investment decisions, are things that I can do on your behalf, but most strategies include some sort of action from YOU.

Repeat: Over time, things change. It’s important to continue going through the planning process to make sure we’re updating for changes in family, goals, and income, among other things. Thankfully, the information collection piece tends to get easier as time goes on.

The Value:

“Well, that’s great, but what do I actually get out of it?” Good question! And one I’ve always had a tough time answering. Why? Because the value is different for everyone.

There’s a financial component, yes. It’s rare that I’m not able to help the people I work with save at least half of what they’re paying me through various means (but I cannot guarantee any savings at all). Depending on the situation, that may be savings on taxes, insurance, investment fees, debt interest or outright forgiveness… The list goes on, and for many, it’s multiple items.

But there’s also the life aspect. Think about the services you pay for. They all do something to improve your life.

Could I change the oil in my car? Probably. But it would take me a lot longer than a professional. I would get dirty, and I might screw something up while I’m at it.

Can I cook my own dinner? Absolutely, but I go out to eat because sometimes it’s nice to not have to cook or clean up after. I also enjoy the experience of sitting at a restaurant and being served.

The Plan:

“What do you cover in financial planning?” Man, you’re full of great questions! This one’s a little easier. Below is a list. It’s not comprehensive, but it’s a good representation of at least 90% of what I help people with. It’s important to understand that we won’t cover it all at once. We’ll handle what’s most important first, then move onto the rest.

  • Defining Goals

  • Figuring out what’s possible for you

  • Providing alternatives to current goals

  • Aiding the understanding of important trade-offs

  • Investments

  • Investment management and direction on outside accounts (like 401(k)s)

  • Risk-based allocation

  • Choosing accounts to contribute to

  • Figuring out how much to save in each account

  • Insurance

  • Life type and amount

  • Disability planning

  • Long-term care planning

  • Health

  • Property and casualty (home & auto and liability)

  • Cash Flow and Debt

  • Understanding required savings

  • Analyzing options for student loan repayment and potential forgiveness

  • Taxes

  • Tax preparation

  • Tax planning

  • Roth conversion planning

  • Estate Planning

  • Beneficiary review

  • Document review (ensure it still matches with intentions)

  • Estate liquidity

  • Employer Benefits Review

  • Insurance offered

  • Retirement plan advice

  • Equity compensation


Do you need an advisor like you need oxygen? I certainly hope not. But it’s usually not a bad idea to engage a professional, so you’re ready when the complicated things come up.


As always, keep in mind that you don't have to go it alone. I'm a financial planner in Eau Claire, Wisconsin, and I work virtually with people across the US. Check out my website to see what it's like to work with me and reach out if you have any questions.

If you found this post helpful, help spread the word! Share with friends and family that you think may benefit as well. But remember, this is solely for educational purposes - it's not advice.

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