What are the 6 areas of comprehensive financial planning?
The six core areas of financial planning include financial position (cash flow/debt), protection planning (insurance), investment planning, tax planning, retirement planning, and estate planning.
1. Financial Position/Cash Flow Management
- Cash flow / budgeting
- Debt management and emergency reserves planning
2. Protection Planning (Risk Management)
- Life, Disability, and Long-term care insurance
- Employee benefits
3. Investment Planning
- Portfolio management and institutional level management
- Evaluating risk tolerance and time horizon
4. Tax Planning
- Company retirement plans and personalization
- Traditional, Roth, and Rollover IRAs
5. Retirement Planning
- Distribution planning and income identification
- Plan for "sequence-of-returns risk"
6. Estate Planning
- Wealth transfer and business succession
- Co-ordination of insurance and estate documents
Each area is critical and should be planned alongside others, not in silos.
