• Sun. May 26th, 2024

15 Overlooked Financial Planning Topics Clients Forget To Ask About

When it comes to financial planning, clients often rely on their financial planners for guidance and advice. However, clients may not always be aware of the crucial topics or trends that may be overlooked during these meetings. From insurance coverage and tax planning to estate planning and investment strategies, these overlooked areas can have a significant impact on an individual’s financial well-being.

Below, 15 Forbes Finance Council members share insight into the common blind spots in financial planning that personal clients often forget to consider or ask about. By shining a light on these commonly overlooked issues, clients can be better equipped to have meaningful discussions with their financial planners and ensure a comprehensive financial plan that covers all the bases.

1. Transferring Real Estate Without Considering Taxes

Clients often transfer real estate between generations without considering the tax impact. For example, transferring property before death does not get a step-up on a tax basis. Such pre-death transfers can cost families hundreds of thousands of dollars in tax if done prematurely or without careful analysis and planning. – E. Martin Davidoff, Prager Metis CPAs, LLC

2. Determining A Personalized Inflation Rate

Inflation has changed the landscape. Individuals need to consider the effects of inflation on their personal budgets and investments. However, the headline consumer price index considers categories of goods and services that may be inapplicable to certain households. Investors should ask their advisors to help determine their personalized inflation rate. This helps each individual’s long-term financial planning. – Petros Koumantaros, Spectrum Pension Consultants

3. Finding A Specialized Financial Planner

Studies have shown that 90% of financial planners focus on what we call the “Grow, Grow, Grow” era of life, helping you, well, grow your money. But retirement requires a different set of tools and attitudes. If you are planning to retire in the next three years be sure to find a specialist retirement guide that has the tools to help you navigate retirement successfully. – Mark Troyer, Troyer Retirement

4. Protecting Assets From Lawsuits

Many wealthy individuals forget the importance of protecting their assets from lawsuits. There are literally millions of lawsuits filed every year in the United States. Some individuals are proactive and protect their wealth using an offshore asset protection trust, which is perfectly legal when done properly. However, the majority of wealthy individuals miss out on this opportunity. – Blake Harris, Blake Harris Law

5. Understanding The Significance Of Taxes

Taxes are as certain as death and I find most clients don’t know how to handle them. Be it dealing with taxes on current investments or evaluating the tax burden they may face in retirement, clients are usually unaware of how significant the tax question is. Planning with appropriate vehicles and allowing for some additional tax is a sure way to find success. – Joshua Sherrard, Strategic Navigators Inc.


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6. Taking Advantage Of Specialty Tax Credits

At times, traditional certified public accountants use traditional methods to file taxes in a traditional way, but every client is unique and cookie-cutter methods aren’t always the move. Many people, especially business owners, entrepreneurs and those in real estate, miss out on unique or specialty tax credits. It’s worth double-checking that you’re taking advantage of all opportunities to decrease your tax burden. – Julio Gonzalez, Engineered Tax Services Inc.

7. Managing Risk And Estate Planning

Clients forget about risk management and estate planning. Clients usually want to inquire and focus on wealth accumulation. Although this is a major part of a financial plan, it is not the plan itself. A financial plan includes risk management, wealth accumulation, wealth preservation and distribution and legacy planning. These are not “fun” topics but are crucial to a financial plan. – Loren Rojas, Northwestern Mutual

8. Allocating Money To A Savings Account

Clients forget how much they should be earning in their savings accounts since we’ve become accustomed to earning nearly zero these past few years. Now you can earn above 4%, which is a meaningful difference. On $100,000 that’s over $4,000 a year. Brick-and-mortar banks continue to pay less than 1% and many clients are complacent with these rates, missing out on significant interest earnings. – John Abusaid, Halbert Hargrove

9. Understanding Lingering Impacts Of Inflation

Clients tend to overlook the impact inflation has on their long-term financial planning. Some fail to realize the lingering effects that extend beyond the present day, including increasingly volatile interest rates, reduced value of fixed-income investments, higher retirement costs and diminished purchasing power. Long-term financial health should be at the forefront of each consultation. – Mara Garcia, Phonexa Holdings, LLC

10. Valuing Liabilities Like Assets

Clients often only think about their assets when it comes to a financial planning conversation. We try to get our clients to focus on both sides of the balance sheet, their assets and liabilities. This has become even more important recently, with rising interest rates and floating rate debt becoming much more costly. – Mike Durso, ShoreHaven Wealth Partners

11. Owning Equity

Startups usually offer equity to their employees, but sometimes they don’t realize that holding shares and options makes them investors in the company, so they don’t ask the necessary investment questions. Understanding what owning equity means is important; the type of equity you’re receiving, vesting schedule, strike price, expiration date, valuation and tax implications, are just some considerations. – Karim Nurani, Linqto

12. Determining How Many Times To Meet With A Financial Planner

When it comes to tax strategies and advice, clients should ask if tax professionals can help advise them throughout the year on financial planning, versus a one-time-only conversation on tax filing. Life changes mean financial changes, and asking about how the relationship is structured and the associated costs is a key part of what clients should want in a conversation to achieve their goals. – Barry Pennett, Intuit

13. Asking About The Bigger Picture

It is important to understand how intertwined all of your matters and goals have an impact on your financial well-being and how accomplishing them may not always be a straight-line trajectory. Figure out your time horizon and focus on spreading the money you have using tax efficiency to see what works best for you to work towards your goals. – Letitia Berbaum, The Zandbergen Group

14. Establishing A Balance Between Business And Personal Well-Being

Are you happy? Doing what you want, when you want, how you want and with whom you want is critical. Leaders should intertwine happiness with financial well-being. It’s remarkable how often this simple question and follow-up results in reflection. – Anthony Williams, Mosaic Financial Associates

15. Considering How Personal Factors Play Into Financial Decisions

I am not an advisor, but I have an advisor. We have hard conversations, but identifying “what could be in the way of your future” is the most important question I can think of. He asks about my children and current projects that may impact goals or our health. He asks if any spouse will have a financial impact (e.g., be out of work for a bit or forever). Then we plan for ways to mitigate these items. – Cynthia Hemingway, Fourlane, Inc.

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