Integrated financial planning: One couple’s story
Summary of "Integrated financial planning: One couple’s story"
My Money
Vol. 3, No.4, September-October 2008
In a couple, each spouse can manager their money on an individual basis. But there comes a time whenthey will need to discuss their combined financial future.
Assisted by Isabelle Lemay, a financial planner with Caisse Centre du Bas-Richelieu, Josette and Raymond Duval took advantage of integrated financial planning. This process takes into account every aspect of a couple's finances to obtain a complete financial picture. When the client has a need that requires more specialized services, the financial planner can recommend a notary, a tax expert or a financial security advisor. In other words, the couple's finances are looked after from A to Z.
Focus on integrated financial planning
The process assesses in greater detail the legal aspects in cases of separation, illness and death. Wills, mandates in case of incapacity, cohabitation agreements (for common-law spouses) and other documents are gone over with a fine-tooth comb to ensure that they reflect the couple's current situation.
Tied in with the legal aspects, estate planning specifies how property is to be divided after a person's death, among other details. Insurance and risk management coverage is also examined to see if the person is over- or under-insured. As for investments, the financial planner assesses whether they correspond to the individual's investor profile as well as to his or her short, medium and long-term plans.
According to Ms. Lemay, taxation is the topic that most clients look forward to discussing. "Paying less tax is a subject that always gets people going," she says.
The final aspect discussed is that of retirement, where the financial planner, together with the couple, design a best-case scenario taking into account retirement age, income, investment payouts and tax implications.
Your business is my business
Does integrated financial planning mean putting all your eggs in one basket? "Not at all," says Ms. Lemay. "Nevertheless, it is important to be aware that a decision made by one half of a couple may affect the finances of the other half. As well, there are countless tax provisions that a coupl might miss out on if they prepare their taxes as individuals."
While the couple is still working, however, there is no need to manage their individual portfolios as a unit. "Each person can manage their portfolio according to their investor profile, but there has to be a certain logic to it. It has to be right on target when payout time arrives. It is important therefore, to keep the concerns of the other in mind, and to respect their individual opinions," adds Ms. Lemay. In short, integrated financial planning allows the couple to build on each other's strengths within a common strategic framework.
Planning is reassuring!
Some people might put off meeting a financial planer for fear of being committed to a strict retirement savings and financial planning process. "Financial planning is flexible, "insists Isabelle Lemay. "People don't have to lock themselves into a 'one-size-fits-all' scheme. The goal of the financial planner is to recommend several viable options that will dispel financial worried while respecting each individual's lifestyle and objectives."
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