Financial planning is a widely discussed concept due to its ability to streamline savings and investments, goal setting, and achievement.
However, many of us wonder which is the right path between one-time financial planning and ongoing financial planning. While there may not be a fixed answer to this, understanding the basics and differences of these approaches can help you make the decision that suits you best. One-time financial planning provides a comprehensive snapshot of your financial situation at a single point in time and is ideal for immediate and straightforward financial decision-making. On the other hand, ongoing financial planning involves a continuous partnership with a financial advisor, adapting to life's changes through regular updates and strategic adjustments to your financial plan. Consider consulting with a professional financial advisor to help determine whether one-time financial planning advice or ongoing financial planning would be more suited to your needs and goals.
As we approach 2024, the dynamics of financial management are increasingly influenced by technological innovations and a shift towards sustainable investing, reshaping how advice is delivered and personalized. This article will compare these two approaches to financial planning, emphasizing the sustained benefits of ongoing engagements over one-time consultations.
Understanding the strengths and limitations of each can guide you to the optimal choice for your financial needs and goals.
What is one-time financial planning?
One-time financial planning is a discrete, comprehensive review and advisory session that focuses on crafting a strategic plan based on an individual's current financial status. This form of planning is typically condensed into a single, thorough consultation that results in a tailored plan addressing specific financial goals, challenges, or questions at that moment in time.
This approach is particularly suited to situations where financial needs are straightforward or when major, one-off decisions need to be made. For example, individuals considering a significant change in their financial landscape—such as buying a home, receiving an inheritance, or contemplating a large investment—might find a one-time checkup sufficient. Similarly, those nearing retirement might seek a one-time session to ensure their savings and investment strategies are aligned with their retirement goals.
One-time financial planning provides a static plan without subsequent updates unless further consultations are initiated by the client. It offers direct, actionable advice that applies to the client’s immediate financial situation and is not designed to adapt to future changes unless revisited.
In a nutshell, one-time financial planning serves as a strategic blueprint crafted during a single consultation, offering specific recommendations tailored to immediate needs without ongoing adjustments. This service is best suited for individuals with clear, defined financial objectives or those facing immediate, significant financial decisions.
What is ongoing financial planning?
Ongoing financial planning is a comprehensive, adaptive approach to managing your financial health that extends beyond a single consultation. It involves a long-term relationship with a financial advisor who continuously monitors and updates your financial strategy in response to changes in your personal circumstances, economic conditions, and financial markets.
Unlike a one-time advisor, who provides recommendations based solely on your financial situation at a specific moment, an ongoing financial advisor becomes a financial partner committed to your success over the long haul. This partnership includes regular reviews and adjustments to ensure that your financial plan remains aligned with your evolving goals and the changing economic landscape. For instance, changes in income, marital status, or financial goals such as buying a house or saving for a child's education would prompt a reassessment of your financial strategies under ongoing financial planning.
The continuous engagement allows for a dynamic financial planning process where strategies are regularly refined. This might involve adjusting investment portfolios, revisiting retirement plans, or reassessing risk management strategies as life events occur. This approach offers the flexibility to navigate uncertainties and opportunities with expert guidance every step of the way.
In essence, one-time financial planning vs ongoing financial planning highlights the difference between static advice and dynamic guidance. Ongoing financial planning is about building a relationship with an advisor who understands your initial financial situation and evolves with you. The advisor offers tailored and timely advice that anticipates and reacts to changes in your financial life. This proactive approach helps in securing not just current stability, but also future prosperity.
Below are some of the benefits of ongoing financial planning:
1. Continuous adaptation to life changes
Life is unpredictable, and financial situations can change rapidly due to factors like career transitions, family growth, or unexpected financial needs. Ongoing financial planning excels in its flexibility to adapt to these changes. Unlike a one-time financial plan, which provides a snapshot solution, ongoing planning evolves. This adaptive process involves regular updates to your financial strategy to reflect new goals or address unforeseen challenges, ensuring that every financial decision supports your overall life objectives.
2. Proactive support and risk management
With an ongoing financial plan, your advisor continuously monitors financial markets and your personal life changes to proactively adjust your portfolio and strategies. This constant vigilance helps mitigate risks associated with economic downturns and financial volatility. The ability to respond quickly to market conditions or to optimize tax strategies before year-end can significantly enhance financial outcomes, turning potential vulnerabilities into well-managed exposures.
3. Financial and emotional peace of mind
Perhaps one of the most significant benefits of ongoing financial planning is the peace of mind it offers. Knowing you have a trusted financial partner who understands your history, goals, and personal challenges can relieve the stress of financial decision-making. This relationship provides not just financial guidance but also emotional support, helping clients navigate complex decisions and uncertain times with confidence. The advisor acts as a sounding board, educator, and counselor, fostering a sense of security and well-being that transcends financial metrics.
4. Educational benefits
Continuous engagement with a financial advisor also helps clients become more financially literate over time. This education empowers clients and enables them to make informed decisions and participate actively in the planning process. Regular discussions about investment strategies, risk management, and financial products demystify complex financial terms and concepts thereby enhancing the client’s ability to contribute to their financial well-being actively.
Thus, the one-time and ongoing financial plan comparison highlights that while a one-time plan can be suitable for static situations, the ongoing plan offers a dynamic and supportive approach that adjusts to life’s complexities. It aims to safeguard assets and helps enrich clients' understanding and confidence in their financial journey. This continuous relationship ensures that your personal finances are always aligned with current circumstances and future ambitions, providing a comprehensive, proactive approach to personal financial management.
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Comparison and contrast between one-time financial planning and ongoing financial planning
When deciding between one-time and ongoing financial planning, understanding the immediate and long-term impacts of each approach is crucial. Both methods serve distinct purposes and cater to different financial needs and life stages.
a. Immediate impact: One-time financial planning
A one-time financial planning session typically focuses on specific, immediate financial issues or decisions. For instance, consider a professional in their early 30s receiving a significant inheritance. They may opt for a one-time financial planning session to decide how best to invest their windfall. The immediate benefit is a clear, actionable plan tailored to the current financial situation, that may help maximize the inheritance in the short term without ongoing adjustments.
b. Long-term impact: Ongoing financial planning
In contrast to one-time financial planning, ongoing financial planning offers a strategic advantage by adapting to changes over time. Suppose a business owner in his mid-40s with a fluctuating income and multiple financial goals, including college savings for his children and retirement, wishes to chart his financial future. Regular meetings with his financial advisor may help him adjust his plans as his business grows and his personal life evolves. This continuous adaptation will not only align with his changing financial landscape but also maximize his investments and savings strategies over decades.
Who should choose what?
The decision between one-time and ongoing financial planning should be based on an individual’s financial situation, goals, and the complexity of their financial landscape.
a. Ideal candidates for one-time financial planning
One-time checkup with a financial advisor is best suited for individuals with straightforward financial situations or those facing a specific financial decision or milestone. This might include young adults or families without significant debt, complex investments, or major life changes on the horizon.
b. Ideal candidates for ongoing financial planning
Ongoing financial planning is recommended for individuals with more complex financial situations or those who anticipate frequent changes to their financial or personal circumstances. This includes high-net-worth individuals, business owners, or families navigating multiple financial goals simultaneously.
Choosing between one-time and ongoing financial planning, thus, depends on the individual's financial needs, life stage, and how dynamic their financial situation is. One-time planning can efficiently address specific, isolated financial decisions, while ongoing planning is designed to provide a comprehensive, evolving strategy that adapts to changes in personal circumstances and financial markets.
Is ongoing financial planning more beneficial than one-time financial planning?
By incorporating ongoing planning into your financial strategy, you open up opportunities to maximize your tax savings over time. Through ongoing planning, you gain the ability to strategically manage important decisions such as Roth conversions and the timing of initiating Social Security benefits. Moreover, staying informed about new tax laws and estate regulations enables you to adapt your plan accordingly, ensuring its ongoing optimization from a tax perspective.
Unlike one-time planning, which offers limited adaptability, ongoing planning provides the flexibility necessary to leverage evolving financial landscapes. Advisors specializing in ongoing planning bring valuable experience, having navigated through diverse market conditions and regulatory changes. Their expertise not only enhances investment returns but also maximizes tax savings, often outweighing the costs associated with ongoing planning.
By embracing ongoing planning, you position yourself for long-term financial success while proactively managing potential tax implications, ultimately securing a more robust and adaptable financial future.
To conclude
One-time financial planning offers a snapshot approach, ideal for addressing specific, immediate financial questions with targeted, actionable advice. However, ongoing financial planning provides a more holistic, adaptive strategy, designed to evolve alongside an individual's changing financial circumstances and goals.
The benefits of ongoing financial planning far surpass those of a one-time consultation. This approach not only caters to the complexities of a fluctuating financial landscape but also offers peace of mind through a sustained partnership with a financial advisor who is committed to your long-term success.
To make the right choice, a consultation with a financial advisor may be a good idea. This step will allow you to discuss your specific financial circumstances in detail and explore the most suitable planning approach for your financial future. Whether you opt for a one-time review or an ongoing advisory relationship, the right financial planning can set the stage for financial stability and growth.
Use the free advisor match service to get matched with experienced financial advisors who can offer suitable financial planning advice based on your needs, goals, and aspirations. All you have to do is answer a few simple questions based on your financial needs, and the match tool can help connect you with 2 to 3 advisors best suited to meet your financial requirements.
For additional information on effective financial planning strategies for your current financial goals and requirements, visit Dash Investments or email me directly at dash@dashinvestments.com.
About Dash Investments
Dash Investments is privately owned by Jonathan Dash and is an independent investment advisory firm, managing private client accounts for individuals and families across America. As a Registered Investment Advisor (RIA) firm with the SEC, they are fiduciaries who put clients’ interests ahead of everything else.
Dash Investments offers a full range of investment advisory and financial services, which are tailored to each client’s unique needs providing institutional-caliber money management services that are based upon a solid, proven research approach. Additionally, each client receives comprehensive financial planning to ensure they are moving toward their financial goals.
CEO & Chief Investment Officer Jonathan Dash has been profiled by The Wall Street Journal, Barron’s, and CNBC as a leader in the investment industry with a track record of creating value for his firm’s clients.