Most people have no idea what working with a financial planner is like.
Every prospective client I speak with has questions about what it’s like to work with us at Flow. While nothing can replace the actual experience, I hereby swear to write as much as necessary to paint that picture! No word left unturned!
Let’s start with our Annual Renewal Meeting.
Why? Because it is the keystone of our ongoing relationship with you, year after year.
Did you notice that we call it a Renewal Meeting, not a Review Meeting? That’s on purpose! Yes, we review the last year so we can celebrate your accomplishments and progress. More importantly, we renew your vision, your energy, and the plan to bring that vision to life. I think that’s exciting!
How You Can Use This Post
While I’m writing this primarily for those of you who might want to work with us at Flow, I can see it being potentially useful for several groups of people:
You are looking for a financial planner. You can judge whether Flow might be a good fit for you, and you can use our description to help evaluate other planners and their services.
You are already working with a financial planner. You can see if we’re providing something for our clients that you’re not getting from your planner (and would really like to get). Or maybe it’ll simply reassure you that your planner is great or “thank goodness they’re not like those Flow weirdos.”
A Disclaimer (Naturally): Things Always Evolve
After over eight years in business, I have tried a lot of different ways of doing things. Many things. Many ways. So, it’d be foolish to imply that the way I approach the Annual Renewal Meeting now is definitely the one I’ll still be using in five years. But I also have experimented enough to know that the current way is good and sustainable and I’m in no rush to change it.
(I wrote an article for an industry blog explaining why I moved to the Annual Renewal Meeting from my previous approach.)
Why You Should Care about the Annual Renewal Meeting
If I had to choose a single reason that the Annual Renewal Meeting is important to you, I’d say: It forces you (and your partner) to set aside meaningful time to sit with, think about, and talk about your life and finances.
Left to our own devices, most of us won’t do that. Sure, we’ll low-key worry about our finances all the time, but we won’t have an actually helpful, organized conversation about it. Why would I do that nonsense? Amorphous anxiety makes me feel alive, alive I say!
Isn’t that a ringing endorsement of working with a financial planner? “Work with me! I’ll…schedule time on your calendar!”
But of course, you know how important that actually is sometimes. Having sat with enough clients in this way for years now, I find it kinda beautiful to observe what often comes out of this time and focus, especially with a third party (i.e., me, in case that wasn’t obvious) who really cares about you being happy and fulfilled.
But wait! There’s more!
You are more confident and comfortable, because now you know what’s actually going on across your entire financial life. How has your net worth changed, and why? How are your investments performing? Are you on track to max out your 401(k) by year’s end? How much cash do you have?
You now know what you need to change, instead of just stressing over what might need to change. Your life and finances change over the course of a year. Someone needs to figure out how you need to change your finances in response. That’s us. We’re the someone.
You know which top one or two priorities to focus on. You’d be overwhelmed if we just gave you an undifferentiated list of all the stuff you need to think about and do to improve your finances.
You can get excited about what comes next! Most of us get trapped into thinking about only the demands (and joys!) of the now. We neglect to look ahead to what we can build our lives into. The Annual Renewal Meeting is your chance to do that, along with someone who’s an expert not just in personal finance, but in your personal finance. (Again, me. That expert is me.)
Behind the Scenes: How We Prepare for the Meeting
Of all the hours spent on the Annual Renewal Meeting, the vast majority of them are spent behind the scenes, us beavering away, invisible to you. You’ll see the results of that work in the meeting, and I thought it might be helpful to see how we do that work.
#1 Understand the Big Picture
We want to start with a strong handle on the Big Picture of your financial life, kind of like looking at the picture on the boxtop of a jigsaw puzzle. When we start at that Big Picture level, we better understand how the details fit in, and we can more usefully discuss any issues you bring up.
To build that picture for ourselves, we look at:
- Your Written Plan (your statement of financial purpose, goals, and net worth)
- Your answers to our pre-meeting questionnaire
- Notes from last year’s Annual Renewal Meeting and meetings since then
- Recent email conversations
- Our “Future Meetings” document (a “dumping ground” Google doc where we record thoughts throughout the year as we think of something that might be important for you)
- Tasks previously assigned to you or us
In all this prep, we use a “past/present/future” framework to try to create a unified picture of your life. We want to understand what has come before (and what we can learn from it), what’s happening now (that’s the only stuff we can change), and what might happen in the future (that we should start thinking about and maybe planning for).
We’re regularly building a list in the backs of our heads of: What are your strengths? What are the opportunities for you to improve? What are the most urgent and/or important things for you to focus on?
#2 Review the Financial Planning Technical Stuff
We review a long list of technical things in your financial life. This part is probably more along the lines of what you’d expect of a meeting with a financial planner. Maybe you’re interested in the specifics, or maybe you glance over the list and think, “That’s cool. Looks like you know what you’re doing. Carry on!”
Would you benefit from reviewing these parts of your financial life, as we do for the Annual Renewal Meeting?
- Education funding: Investments, savings rate, account balances for your kids’ education
- Cash flow/Savings rate: For financial independence (retirement), shorter term goals
- Paystub review: 401(k) and HSA contribution status, anything … peculiar on your paystub
- IRA Contributions: Eligibility for IRA contributions (direct Roth, backdoor Roth) and a plan for when to contribute and how to fund the contribution
- Cash cushion: Cash you have vs. cash you need, a plan for the “too little” or “too much,” interest rate
- Company stock: Concentration in your total portfolio, sales strategy, upcoming expiration dates, options-exercise strategy
- Your child’s age: If they’re turning 16, auto insurance and liability insurance; if they’re turning 18, preparation for them becoming legally independent (like HIPAA release)
- Your age: Changes to your contribution limits for your 401(k), IRA, or HSA; eligibility for withdrawing penalty-free from retirement accounts
- Withdrawal rate/dollars: If you’re living on your investment portfolio, both historical and projected
- Coast FIRE analysis: If we suspect you might be close to or in Coast FIRE (Don’t know what that is? More or less no one does. Read the linked blog post. It’s a powerful concept!)
- Estate planning: Documents (like a will and power of attorney), beneficiary designations (reviewed every other year)
- Insurance: Life, long-term disability, homeowners or renters, umbrella liability, auto, etc. (reviewed every other year)
- Taxes: Check in on your relationship with your CPA, revisit any parts of our tax-return review that warrant it, and several more tax-related topics:
- Tax strategies for an unusually high or low-income year: IPO years (high income/tax rate!) or sabbatical/layoff years (low income/low tax rate!) give us fleeting opportunities: charitable donations, Roth conversions, selling investments at a gain, etc.
- Charitable giving: How much you are giving vs. how much you want to give, how you’re donating the money (credit card, stock, directly to charity vs. Donor Advised Fund, etc.)
- Net Worth: Change from last year, explanation for change, and whether that change is acceptable or you need to change something
- Account consolidation: Opportunities to simplify your financial life by reducing the number of accounts you have—either bank accounts or investment accounts
#3 Review Investments
Accounts We Invest for You
We can do the most for the investments we manage for you. We look at:
- Your Investment Policy Statement (a document that states what we’re investing for and the high-level strategy for investing). Does it need to change due to changes in your life?
- Your actual investment portfolio. How closely is your portfolio abiding by the strategy in the IPS? Has it veered away from it? What changes do we need to make to bring your portfolio back to target?
- How much cash is in your portfolio (more of an issue for clients living on their portfolios). Do we need to generate more?
- Special investments you own, like company stock or other concentrated stock positions. How concentrated are you?
We send this review to you several days before the meeting, with a video explaining our review and any changes we recommend.
Why do we do this part ahead of time? Because usually you just want to know that we’re paying attention to it and to know generally what’s going on in your portfolio. Beyond that, we’ve usually found that clients don’t have many questions. So, I’d rather use the meeting time for you to talk, instead of me droning on about your investments.
Accounts We Don’t Invest for You
We don’t (usually because we can’t) manage certain accounts for you, for example, 401(k)s, HSAs, education 529 accounts, and company stock plans. We do, however, still make sure they’re invested appropriately for you:
- Are your investments low-cost enough?
- Is the account invested with an appropriate balance of stocks and bonds (i.e., your “asset allocation”)? Do you need instructions for how to “rebalance” it?
If it’s an HSA, we look to see if you have been withdrawing money from it to pay medical bills. Yes, I know that’s the whole purpose of this account, but usually clients are better off using it as a retirement account that they don’t touch for many years.
And sometimes clients have “play” accounts: accounts that they invest on their own, usually in individual stocks, crypto, or other “gambles.” The only thing we monitor here is the size of the account. Has it grown to be too large a part of your total investment portfolio?
#4 My “Woo” Preparation
All the prep I just described is essential. There is no Annual Renewal Meeting without it. And by itself, it’s enough! You can have a good, even great, meeting with it.
I have found two practices that make me even better at running an Annual Renewal Meeting:
#1 Five to ten minutes of savanasa-like rest after reviewing all these details. Savasana (translated as “corpse pose”) is the final pose of any physical yoga practice. It looks a lot like just lying there, eyes closed. ‘Cause it is. It is an opportunity for your body to integrate all the benefits of the physical practice you just finished.
As a financial planner, I take a similar short period of quiet and reflection (I might even close my eyes!) after all the heavy Brain Work. And this savasana helps me just sit with all that information, integrating it at some unconscious level. I have found that I emerge from the savasana with a better understanding of what is truly the most important thing for you.
#2 Five-minute meditation right before the meeting. This tames the Monkey Mind a bit. With a calmer mind, I can simply be more present with you. I am more likely to truly “hear” you.
Told you…kinda woo.
The Actual Client Experience: What Happens in The Meeting
So far, I’ve told you nothing about your experience in this Annual Renewal Meeting. It’s been all “me me me.”
What do you experience, as a client? Behold:
Before the Meeting
We ask you to give us some information:
- Fill out a questionnaire
You can see our questionnaire here. (We have a slightly different questionnaire for our clients who are living off their investments.) - Provide a recent paystub
- Make sure that all your financial accounts are up to date in our financial planning software
We can still have a useful meeting even if you provide us with nothing (I know because this has happened not a few times). It’s just more useful when we get more input from you.
You should also receive an email with a short video review of your investments (as described above) in the week prior to the meeting.
During the Meeting
Here’s what we talk about in the meeting itself:
Check-in
Yeah, yeah, there are always the basic conversational pleasantries that make the world go round. I genuinely enjoy seeing dogs and cats and babies and seeing what you’re eating for lunch and hearing about your latest vacation or even the latest chaos at work.
This usually leads pretty quickly and naturally into you talking about what’s on your mind and heart, which will end up being the focus of the meeting.
strengths, opportunities, and priorities
We like to lay out early in the meeting our high-level assessment of your finances:
- Strengths: from a good savings rate to a lot of flexibility in your investment portfolio to demonstrated grit in your career or personal life
- Opportunities for improvement: Could your cash cushion be usefully higher? Do you still need to get your estate planning documents drafted?
- Priorities: Of all the parts of your financial life, what are the few that we think best deserve your time today and your work in the near future?
Review the last year
We review your answers to these three questions, which we asked in the client questionnaire:
- Tell us about one thing you’ve done in the last year that you’re proud of.
- Tell us about one thing you’ve spent money on in the last year that brought you joy.
- Tell us about one organization or person you gave money or other resources to that made you happy!
This discussion helps reinforce how to use money to bring joy and meaning to your life. Sounds pretty helpful for making financial decisions moving forward, eh?
This personally is one of my favorite parts of the meeting: it’s a celebration.
Review net worth
Net worth is one of the few metrics we track every year. We want to know how it’s changing and why. Did the stock market help or hurt? Did you save a lot? Spend a lot?
Over time, we generally like to see it go up. But not always! Depends on your plan.
Review goals
We review your goals (which we record in your Written Plan):
- Have you accomplished a goal? (always fun to check those off)
- What progress have you made towards existing goals?
- Do you have new goals?
- Have the priorities of your goals changed?
- Are some goals not really important to you anymore?
This is not a complex process. It is, however, incredibly valuable. This part of the meeting, using the Written Plan as guide, provides a simple structure to make sure we’re still making financial decisions “in the right direction.”
What you want to talk about
Although I’m dedicating only a few sentences to it here, this is perhaps the most robust part of the. meeting. Depending on what you want to talk about, we can go deep technically and emotionally. We want you leaving the meeting with a deeper understanding of what you need to do and why.
What we want to talk about
This is the stuff that we prepared ahead of time.
Wrap up
We’ve just spent two hours talking about a lot of things; you’re not going to take all that with you. This wrap-up helps cement in both our minds the parts that you will carry with you.
We do three things:
- Schedule the next meeting. (It’s comforting to everyone to know this is on the calendar!)
- Agree to the work we each have to do after the meeting.
- “What are you taking away from our conversation today?” Your reflection here is another favorite part of the meeting for me. It’s such a satisfying window into your brain and heart.
After the Meeting
We send you an email, listing the tasks that we agreed to in the meeting, and provide full notes from the meeting.
I hope seeing “behind the curtains” of our Annual Renewal Meeting (the what, why, and how) gives you a better appreciation for the practicalities of working with us. Armed with such information, may your search for a financial planner be more informed and more confident!
Would you like the comfort and confidence that comes with such a thorough annual focus on your life and finances? Reach out and schedule a free consultation or send us an email.
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Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. We encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Flow Financial Planning, LLC, and all rights are reserved. Read the full Disclaimer.
