What is Holistic Financial Planning?

The What, How, & Why of Holistic

 Financial Planning –

Are you a working professional? Then, I’m sure you understand the challenging nature of money. That is, how relatively easy it is to earn than to manage the wealth pot that will support your and your family’s future.
So, whether you aim for:

1. Living a lifestyle with annual international holidays
2. Preparing college funds for your children
3. Meeting basic requirements of your everyday life

Your financial pockets will affect your performance on life’s success meter. But, this is not all. You also need to invest in financial products that match your goals. Here, the concept of holistic financial planning (HFP) comes into the frame.

Let’s connect the dots of this idea with an example.
Harvey is a senior partner at a local law firm in Dubai and has a family of four – a wife and three children. He wants to start saving for his retirement and build a financial cushion for his triplets. So, he visits two consultants in the city.

1. Consultant A asks him the fundamental questions: age, net worth, present position at the firm, etc. Then, he fills these details in a financial model (that assumes information bits like personal goals). Result: He recommends that Harvey save 10% from his monthly salary into a regular savings plan (not helpful for meeting his goals).
2. Consultant B takes the effort to dig deeper into Iqbal’s life.

First, she asks about his goals, personal wishes, financial responsibilities, and financial strength and then reviews the inflation rate. Then, she prepares a detailed, customised plan that encourages Harvey to opt for a life insurance plan.
Result: She follows a holistic (i.e., an integrated) approach that factors in Harvey’s vision and financial strength to propose a suitable strategy that works in his favour.
Unfortunately, many consultants don’t follow a holistic approach and encourage clients to get products that are not the right fit for their goals.
In this blog, I walk you through the steps and importance of adopting financial planning in Dubai for living a comfortable future.

What is Holistic Financial Planning?

1. An architect understands the client’s thought process before designing a blueprint.
2. A surgeon maps action and backup plans before an operation.
3. A writer digs into resources as part of outlining an article piece.

Do you spot a common thread in these three situations?
It is the process of forming a plan. Ask why?
Without a clear strategy:

1. The architect will not meet their client’s expectations.
2. The surgeon will cost a human life.
3. The writer will write a piece that fails to meet the topic’s sensitivity.

Similarly, when managing money, forming a strategy through holistic financial planning helps understand options best suited for you. It contributes to building a portfolio that will help you achieve your long term goals.
If you invest in financial products without a strategy or after concentrating on singular life aspects, you may make you park your money in either:

1. Same kind of products from different providers
2. A portfolio that is extremely risky and sometimes over-diversified

3-Step Approach to Designing an Effective Holistic Financial Plan

Advisors following the HFP route take the top-bottom approach, i.e. first, they help clients get clarity on their goals and financial health. Later, they focus on the plans to fulfil them. This strategy covers all the aspects of life – personal and financial to ensure they complement each other.
Develop healthy financial planning in Dubai with an advisor in three steps:

Step 1: Map your Goals

What is the purpose of managing your money? Is it:

1. Early Retirement
2. Estate Planning
3. Business Planning
4. Providing Monetary Support for Dependents
5. Divorce Alimony, something else?

Outline your goals and share them with your advisor.
Read: A Step-by-Step Guide to Retirement Planning in UAE

Step 2: Review Financial Health

Next, audit your finances. For example, if you’ve invested in the stock market – how well is your portfolio performing? If a savings plan is in place, are you regular with your monthly contributions? Are there ways to reduce the tax burden? Discuss with your advisor.
Read: 5 Steps to Improve Financial Health

Step 3: Combine Step 1 + Step 2

Let your advisor work out a financial plan and then follow as instructed.
Note: Holistic Financial Planning is a loop that makes minor alterations with changing life events.
Sign with an advisor that takes an active interest in fulfilling your wishes the right way. A good advisor will conduct periodic check-ins with you. They will provide directions to invest your funds strategically and help maintain financial discipline for a safer tomorrow.
Read: Why Should you Trust a Financial Advisor with your Money

Why Should You Adopt Holistic Financial Planning?

Monetary stability results from making reasonable decisions that bring a bucket full of benefits. Build a portfolio strategy through holistic financial planning to avail yourself the comfort of:

1. Living a more confident present and securing the future
2. Being better prepared to face life’s unexpected challenges (illness, death, separation, etc.)
3. Meeting personal and family goals
4. Achieving peace of mind

Plan your Future in Dubai, Today

I hope this blog walked you through the significance of holistic financial planning in your life. Yet, this is easier said than accomplished. So, together, let’s discuss action plans to fulfil your life goals!
Book your first free consultation