What Makes a Great Financial Plan?

September 1, 2021

Dominick Paoloni, CIMA®
CIO & Founder
Portfolio Manager, IPSAX
Adjunct Professor, University of Denver
& University of Colorado

I have found over my 30 + years in the financial community that most financial plans are very plain vanilla templates. Yes, all financial plans contain the six tenants of Tax Planning, Insurance Planning, Retirement Planning, Estate Planning, Cash Flow Planning, and Investment Planning.

Most planners have their views like should you buy whole life universal or term insurance? Are annuities better than mutual funds?  Should you hold your assets in a trust or is a will, okay?  Should the money go outright to your heirs or stay in a trust?  Should you pay off your mortgage?  Many of these questions are cookie cutter.  Unfortunately, some views by planners are slanted based on the excess compensation (above their yearly management fee) they may earn.  Capitalism breeds greed, and greed breeds corruption.

Other financial plans are built with the client’s best interest at heart however, does your planner have the knowledge and expertise to build a great financial plan?

The simple answer to what makes a great financial plan is, does it have a high probability of success. The bullseye of every plan is the investment planning piece. If your money is not growing as projected or the investment piece collapses, the plan collapses. Think of a financial plan as a road trip, and your plan is the vehicle you are driving. Now envision gas in your vehicle as your investment. The investments drive your plan. You run out of gas your plan fails.

I started my journey on Wall Street where I learned investments and became a financial planner in the mid-nineties in which I spent two years attending the College of Financial Planning to complete my Financial Planning Certificate. I felt the curriculum was very weak on the most important part of the planning, the investment piece. I decided to obtain my certification as an Investment Management Analyst through the Warton School of Business. This gave me a much deeper understanding of the investment planning piece of financial planning, however, I felt it still didn’t build a level of certainty that I wanted for my client’s financial future and the ultimate success of their plan.  So, I enrolled in the Chicago Board of Trade Option Institute educational program and well as received a certification from the Options Institute Council of the use of derivatives and options to manage and define tomorrow’s risk today.

I have spent half my financial life learning the correct road to advise clients in estate planning, wealth transfer, retirement planning, educational planning, long-term care, etc. and I spent the second half of my financial life working on the gas that drives the plan. The investment decisions are the bullseye. Everything emanated from the investment decisions.

The Best Plan Will Fail if the Center Collapses

IPS Strategic Capital has been building financial planning advice for our clients for years and although most of our energy is put into working on the gas that drives the plan, we have always been committed to constructing a financial planning framework for our clients.

For any clients that have not taken advantage of a formal comprehensive plan and would like one, we provide this at no additional cost to all our current clients. If you are interested in a formal plan, please reach out to Mallory so we can get the ball rolling.

Dominick Paoloni, CIMA is a member of the OIC Advisory Council and the TD Ameritrade Trading Panel. Mr. Paoloni guides future professionals as an Adjunct Professor at the University of Denver and the University of Colorado. He is a published author and is frequently quoted in financial journals and can be reached at dominick@investps.comIPS Strategic Capital is a Quant firm that builds hedging solutions for corporations, endowments, pensions, advisors, and individual clients. For other hedging strategies or custom hedging solutions please contact IPS Strategic Capital (Investps.com) at 303-697-3174                

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One should always consult an investment advisor before making any investment decisions as well as consider the investment’s objectives, risks, charges, and expenses carefully before investing or sending money. This and other important information about the Strategy are available upon request.

One should always consult an investment advisor before making any investment decisions as well as consider the investment’s objectives, risks, charges, and expenses carefully before investing or sending money. This and other important information about the Strategy is available upon request.

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