Briefcase Study: Team of Three: Who’s in Your Financial Planning Trio?

In Articles, Articles: Kansas City Office, Articles: Salt Lake City Office, Briefcase Studies, SLC Spring 2023, Spring 2023 by Scott Dougan

There’s such power in the number three.

Whether in literature, joke telling, the meats of a club sandwich, or nature itself, three represents completeness, rhythm, and strength. In fact, the triangle is the strongest geometric shape; you see the triangle in roof trusses and bridges. There’s just an elegance and magic to it that is so easily overlooked.

We see threes in retirement planning as well. We often talk about the ‘3 Worlds of Investments’ as a way to better understand the pairing of relative risk with short, mid, and long-term time horizons. Stocks, bonds, cash…three categories of assets. The influence of 3 is everywhere once you begin to look for it. Naturally then, it makes sense to consider the size and makeup of your financial team. Who’s in your financial planning trio?

When you’re putting together your financial planning team, the three critical members are the financial advisor, a tax professional, and an estate planning attorney. These three professional advisors are essential to a well-managed plan that can stand the test of time. So, why are each of these so important? Let’s take a closer look, then I’ll follow with a question that you may not have thought to ask until now.

Financial Advisor

The financial advisor serves a number of critical tasks, some of which are fairly obvious but others not so much. The advisor on your team must understand the big picture of your planning objectives: the resources you have available to you, the goals and desires you’d most like to accomplish, and the risks that are present in carrying out your planning to meet your needs in the most effective way possible. And knowing that the world will change and your plans are going to need adjusting over time makes this role a very dynamic one. Taken further, all retirees will eventually begin to experience some level of decline, whether it’s physical decline, cognitive, or emotional. Thus, your financial advisor serves as a key partner to you living a successful life in a dynamic world, in ways that aren’t only about the money.

Tax Professional

Do you love paying taxes? Have you considered that for most retirees, taxes represent the single largest expense during retirement? And while there’s no silver bullet available to make taxes go away completely, there are countless ways for a seasoned tax professional to shave off the edges of your annual tax bill, resulting in significantly lower aggregate taxes owed over the course of one’s life. The complexity of the US tax system makes this task seem daunting, but most people haven’t considered that much of the tax code is written to show us ways to reduce our taxes by way of tax incentives to encourage certain behaviors. Having a dedicated tax professional on your team – who works with you in a proactive manner – can result in more money in your pocket and in the pockets of your heirs rather than in the IRS’ coffers.

Estate Planning Attorney

It’s tempting to think that an estate planning attorney is someone for only rich people to hire to pass on their vast wealth. The truth is, we’re all likely to pass on some assets and we all need assistance to legally protect the assets we have while we’re alive. Further, the realities of aging mean we’re all going to need some level of medical care during our lives, so the legal directives we share with others through our health care documents are incredibly important to maintaining our dignity while allowing others who care for us to know how to provide the care we need.  To put it simply, building a financial plan that isn’t properly protected legally isn’t really a plan at all. The estate planning attorney on your team plays a crucial role in ensuring that you maintain your dignity and provide the highest use of the assets you worked so hard to attain.   

The members of your financial planning team should ideally work in concert with you and with each other to carry out your wishes now and into the future. So, if this team is tasked with working together for your benefit, it begs the question:

Why are all of these members of your planning team rarely working in the same office?

Wouldn’t it seem logical that if you needed the ongoing and coordinated support of a team of professionals that they actually…worked together? For example, when considering whether a Roth Conversion is in your best interest this year, should your financial advisor, the person who helps to manage your investments, be in close contact with your tax preparer? Of course they should. And before you update beneficiaries on your investment accounts, wouldn’t you like your estate planning attorney to confirm that this is in alignment with your revocable living trust? The power of having a planning team results from the team working in concert with you and one another to ensure each financial move is coordinated for efficiency and effectiveness.

At Elevated Retirement Group, we don’t specialize in retirement planning or tax planning, we specialize in you. So, if you need a coordinated approach to your long-term planning of your most precious assets, we’re working hard to coordinate your team of specialists. It makes sense to us, and we hope it makes sense to you as well. If you haven’t yet realized the power of three in building your planning team, we think it’s time to have a conversation, maybe over lunch with a club sandwich?