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With the financial uncertainty that continues to plague the American market, many people are looking for answers and direction. This state of flux, though, can be remedied with a solid financial plan. It is important, however, to not only have a plan but also to see that you work that plan. Just because it may seem things are changing on a daily basis from financial markets to economic policy, there is no need to delay developing a financial plan.

“So many people have really never given much thought to where they want to be down the road or how they can best get there,” said William Haynes, managing director with Haynes Barker Investment Management, LLC in Jackson. “People are busy with work, kids and life, and financial planning can get put on the back burner. Developing this plan is advantageous for the client as it allows for understanding and establishing goals, risk tolerance, and an asset allocation strategy that will best achieve the long-term rate of return needed to reach individual goals.”

“Putting a financial plan together involves several pieces that require the skills of several experts,” said James Barker, CFA and managing director with Haynes Barker Investment Management. “Those pieces include a will, power of attorney, living will, healthcare proxy and an investment plan. Regardless of a person’s economic status, they need these in place.”

When choosing your “experts,” it is important that you interview people who are qualified and whom you can trust. This team of experts can include an attorney, accountant, investment advisor and financial planner. All the bases must be covered: legal, accounting, investing and insurance. The whole team must work together to ensure that all the pieces are in place and that the plan is working the way it should. “We have seen cases where an individual will establish a trust but never put the assets in it,” said Haynes. “Once the team is in place and the documents developed, a financial advisor can review all these and help formulate and integrate a financial plan.”

“The investment plan should identify the goals and risk tolerance of the investor,” said Barker. “It should provide an asset allocation strategy that will help the investor navigate the volatility of the markets. It will illustrate how saving, investing and spending will affect your net worth and whether you are on track to achieve your financial goals. We also recommend to our clients that we update their investment plan at least once a year.”

The advisor asks questions to determine what the client’s goals are, be they college, retirement or a second home, as well as to learn about the client’s risk tolerance. This allows the creation of an investment strategy with which the client is comfortable and one he or she can stick to in good and bad markets. The plan has to be executed or it is worthless, Barker said.



The goal for any strategic financial plan is to create a well-diversified portfolio that will navigate the ups and downs in the market and, over time, guide the client to a place they want to be. “We see it more as a five-year moving plan that is updated annually to allow for changes in the market, taxes and individual circumstances,” said Haynes. “It positions the client to stay on track toward their goals. Having a plan gives the client an advantage in that it puts the responsibility on the table and delegates who is responsible for what. It is a way to monitor performance and make good changes for good reasons. No one can control what is going to happen. Having a plan can greatly help navigate through whatever life throws your way.”

In executing the plan, communication is key. Frequent communication helps clients stay committed to the plan. When the market is volatile, people can tend to be bombarded with information. “We like to meet quarterly with our clients,” said Barker. “This allows both sides to be well informed and to quickly make needed changes such as being more or less aggressive in investing depending on the circumstances. We also can look at portfolio performance, investments, reallocation of assets, strategizing changes and the clients’ need for liquidity.”

With the constant change of life events, it is important to at least annually re-visit your beneficiary agreements to make sure they reflect your current situation. “Annually review beneficiaries of retirement accounts and life insurance policies to ensure they are consistent with your will or estate plan,” advised Haynes. “Titling of assets should also be reviewed annually to ensure that they are in line with the estate plan and that they put you in a position to minimize tax obligations.”

“The beneficiary agreements of the 401K and the annuity serve as the ‘will’ for those investments. Therefore, these agreements need to be reviewed to ensure that they reflect your current wishes and are in line with your will,” said Haynes. “For instance, if you roll over your 401K into an IRA and your sibling is the beneficiary, you may want your wife to be the beneficiary if you marry. If you have not looked at those documents and updated them to reflect your current status, you may not have the right beneficiary per your current situation.”

“To truly position yourself to ride the tides of the financial markets, it takes more than just creating a financial plan or a will or a trust,” warned Barker. “You have to review these documents periodically to ensure that your assets are adequately protected and that documents are up-to-date with where you are in your life. Also, economic policy and taxes can change over the course of the year. What may have been the federal estate tax exemption when you initiated your trust may no longer be the case. The review process may point out where these documents and trusts need to be changed in order to best protect assets.”

Having a plan is not a new concept, and the process of implementing it has not changed regardless of the economy’s position. Global markets, government policies and personal situations are always changing, Barker said. He explained: Both the plan and its execution are equally important. With a financial plan, emotions are removed from the investing process. With no plan, people could react to the market and do things that do not benefit them. Having a plan better positions one to weather the eventual storms.

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