section 1 - The American College Online Learning Center

c. Another option for solving cash flow needs is reducing expenses instead ofincreasing income.d. Converting assets to income begins with choosing the appropriate way of framingthis issue(1) Some advisors create an income floor for essential expenses(2) Other advisors start with the question “How much can I afford to withdrawfrom the portfolio each year and still make the money last?”(3) An advisor working in this area should be familiar with the different ways offraming the issue and be able to pick solutions appropriate for the specificclient.10. Integrate all considerations, present alternatives, and agree upon a plan.a. There are trade-offs and clients will have to make some difficult choices.(1) Example: Strategies that improve income security in retirement may havea negative affect on wealth accumulation for legacy goals.b. It will be a back and forth process with the client.c. Clients may not fully understand the issues until they see several alternatives.d. Software can help by illustrating a plan and projecting results.e. Planning may go through a number of rounds before a final plan is agreed upon.11. Conclusiona. Time line and action steps that the eight steps of the financial planning processprovides a logical way of proceeding, starting with clarifying the scope of theengagement with the client all the way to developing an implementation programand monitoring the planb. Implementation may involve a team of professionals, including an estate planninglawyer, tax advisor, and others.c. Once a plan has been proposed, approved, and implemented, it is almost time tocircle around to the beginning and start the process all over again to address roadbumps along the way.(1) Big dip in the market(2) Client spends too much(3) Inflation suddenly increases(4) Grandparent takes on financial responsibility for adult children orgrandchildrend. Regular contact is required to evaluate and revise the plan.e. Retirement income planning can be rewarding work(1) You are helping your client invent and navigate a new life stage.(2) It can also be challenging, as it requires a wide range of knowledge andthe tools to help design and implement the plan.LO 1-3-2: Understand how the eight steps of the financial planning processapply to retirement planning1. Step 1: Establish and define the client-planner relationship. (Video: Steps of theretirement planning process: Lemoine)a. When does a prospect become a client?1.15