As the popularity of financial planning has grown, so too have financial plans grown. Literally. In one recent study, 90% of advisors spend at least 6 hours to produce a financial plan, 40% spend upwards of 15 hours, and the sheer length of the physical financial planning document has grown dramatically over the decades.
On the one hand, a longer financial plan implicitly suggests that the plan must include more extensive analysis, more recommendations, and therefore be a “better” plan. And to some extent, that may be true. However, the caveat is that physical financial plans may have grown so large that the associated list of recommendations is too daunting to actually implement. In other words, the thoroughness of being fully comprehensive may not be a dazzling display of value, but simply overwhelming.
As a result, perhaps the best way to demonstrate the value of financial planning is not to make the plan as comprehensive as possible up front, but instead to make it comprehensive by building one module at a time over a span a weeks, months, or years – whatever it takes to help the client to actually implement, one step at a time, until everything is done. Which means in the end, perhaps when it comes to modular financial planning, the parts are actually worth more than delivering the whole up front, at least when measured by the success of actually getting clients to implement?