What Are the Process of Putting Together a Financial Plan? – A conversation between Jackie and Jin

In this week’s live, we welcomed Jin Lee, Team Jackie Porter’s in-house financial planning and strategies lead to share about the process of putting together a financial plan. Jin has close to 10 years of experience in various roles in the financial industry, including financial planning, corporate finance and compliance. Being with Team Jackie Porter for more than 1 year, he has worked on various plans ranging business owners, divorcees and lawyers, especially practice owners.  

Why are you passionate about financial planning? 

To Jin, financial planning is not all just number crunching but also learning about someone’s life in a deep level by reading their numbers and presenting them the guidance on some of their important decisions. Being a financial planner allows him to be in every stage of helping his clients make more informed decisions and thereby witness the impact that he made on the clients at the end of the process.  

What value does Jin and Team Jackie Porter bring to the clients? 

• We bring clarity to their financial situations, reduce, or remove money stress to help them feel confident about their money. Money-related stress is rooted in the uncertainty around one’s financial situations. With more than 10 years in the industry, Jin notices that a lot of people do not even know if there is an actual threat to begin with, not to mention those who are not sure what they need to fight against an actual threat. That is when financial planners come in. We assess whether there is an actual threat to our client’s financial situation. Once a threat is identified, we help them assess how big the threat is and what they can do to overcome it. The key to financial planning is helping clients to think deeply about their present and future circumstances along with best- and worst-case scenarios that can happen 5,10, 20 years from now. 

What is the process of putting a financial plan together at Team Jackie Porter? 

At Team Jackie Porter, there are 4 stages of creating a financial plan: 

• Discovery stage: In this stage, we try to understand our clients financial situation, personal circumstances, and their goals. We ask our clients a lot of questions about their current financial goals, concerns and how they expect their life to look like in the next 5 to 10 years as well as their spending habits. We also gather documents from the clients such as pay stubs, current assets, loans, pension information, and estate documents.  
• Plan development stage: This is the heaviest lifting stage in the financial planning process. Once we receive the needed information, we gather insight about our clients and incorporate them into a drafted financial plan. We then discuss our drafts with our clients to make any adjustments and try different scenarios of their goals. At this stage we look at potential solutions, along with financial issues the client may need to review. For example, what can be done to improve their cashflow, tax circumstances, reduce risks and increase their net worth now and in the future? 
• Implementation stage: Once a plan is finalized, we pass our clients over to our wonderful admin team to help them implement recommendations such as investing in an appropriate portfolio or getting the insurance they need to protect themselves. We may also refer them out to other professionals like accountant, mortgage broker, or legal advisor.  
• Periodic follow-ups: At this stage, we periodically touch base with our clients at least once a year to see if there were any changes in their life. If there are any material changes, we assess whether we need to revise our plan to see how our prior findings and recommendation will change. If changes are warranted, then we revise our clients’ plans and present new findings and recommendations.  

Could you describe how you incorporate those stages into developing an actual plan for your clients? 

Case 1: Lawyers/practice owners  

• Situation: We once had a client who already retired and is in their late 50s to 60s. They have good assets and pension. However, their expenses are high, and most assets are in RRSP and corporate investment accounts.  
• Tasks: Their high RRSP balance and expenses tell us our client has a high taxable income and a lot of taxes for them to pay. Therefore, we had to figure out the best way to withdraw funds from their investment accounts to minimize the taxes that they had to pay.  

• Action: We were able to formulate a tax strategy which involved deferring pensions as much as they can and using RRSP during the early retirement years as much as possible. This way they can stay in lower tax brackets during early retirement years while increasing their pension benefit amounts in the later years. 
• Results: Their estate at the end of the plan year was expected to increase by several hundred thousand dollars in today’s dollars.  

Case 2: Business owner/self-employed  

• Situation: One of our clients was in their late 40s and in the process of building a successful, growing business. She wanted some guidance on how much she needed to generate in business revenue to fund her lifestyle and retirement. 

• Task: We decided to go through her numbers and lifestyles to create the best suited plan and help her achieve her financial goals.  
• Action: We worked together to identify all current and expected future expenses and to calculate how much after-tax personal income she needed. From there we reverse-calculated pre-tax personal income, after-tax business income she would need to for the target personal income and ultimately calculated business revenue based she needed to make it all happen 
• Results: We successfully gave her a clear revenue target the needs to achieve her goals. 

At Team Jackie Porter, we believe having clarity on one’s financial situation and guidance on how to achieve one’s financial goals can be valuable not only for business owners but also for anyone who wants to remove or reduce their financial stress. That is why we always ensure our financial planners provide high quality, and personalized guidance for our clients. We are proud to make financial planning accessible to everyone. If you are ready for your next financial journey, reach out to us at info@askjackie.ca to schedule a FREE 30-minute financial consultation with our team. Thank you Jin for coming to the live and sharing with us your in-house, behind the scenes experience of putting togher a financial plan at Team Jackie Porter.