Holistic financial planning is a top down approach to planning that focuses on your big picture goals and values rather than a one size fits all approach or viewing your financial life in silos. Similar to holistic medicine, the focus is on the whole you. That is, your goals, values, and experience with money.
Holistic financial planning came out of a movement to move away from a product-driven approach to financial planning in which your advisor's goal was to sell you a product such as life insurance, a mutual fund, or an annuity. Holistic financial planning is about achieving your life goals by properly managing your financial resources. In short, your goals are driving the planning process rather than product sales.
To take this type of approach, you have to work with the right type of planner or advisor who is a fiduciary legally worn to put your interests first. That means not working with someone who gets commissions from an insurance company, broker or bank to sell you a product. If you aren't paying your financial advisor directly, then you have to assume that his or her interests are not necessarily aligned with your own.
Holistic financial planning dovetails with comprehensive financial planning which looks at all the components of your financial life including cash flow analysis, risk management, retirement planning, investment management, tax management and estate planning.
Additionally, taking a holistic approach to financial planning can also mean ensuring that your financial life aligns with your values. For example, investing in socially responsible or environmentally responsible investments. With this type of ethical investing, there are many approaches to take from a socially responsible focus to an environmental lens or through impact investing which seeks not only good returns but also measurable social benefits.
If Holistic Financial Planning sounds appealing to you, learn more about my approach here.
Investing involves substantial risk and has the potential for partial or complete loss of funds invested. Investments mentioned may not be suitable for all investors. Before investing in any investment product, potential investors should consult their financial advisor, tax advisor, accountant, or attorney with regard to their specific situation.
