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This Is Why a Financial Planner Should Be Almost Schizophrenic

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Something strange is going on with financial planning.

Something schizofreens almost.

Fortunately it has almost nothing to do with you as a person.

But how you deal with financial planning software.

And I know how to handle the software:

  • You enter the numbers down to every detail
  • Until behind the comma as it were
  • For example, as you enter a declaration

Yet?

And luckily.

Because every miniscule change can have a huge impact on the outcome.

So you have to be enormously focused on the correct input.

And do you know what is so schizophrenic?

You do not have to enter the software in every detail.

Huh?

Yes indeed. You read that right.

It is not good to make the planning down to every detail.

And do you know why?

Because we cannot predict the future of the customer.

And this is very different from making a declaration, for example.

Because when making a declaration you use data  from the past.

While you use figures with financial planning… ..

Right.

From the future.

And this is an essential difference.

The difference between other financial work (such as making a declaration or drawing up annual figures) and financial planning is not so much in the figures themselves.

But in  the determination of the figures.

And I mean in determining the numbers that you enter in the software.

Take for example the value of a participation in an operating company.

Nobody  knows what the value of this company will be in 5 years.

Related: Small Steps Have a Big Impact on Your Financial Planning Prospects

So what’s better?

Increase participation in every detail?

Or provide an estimate of the participation (which you have determined together with the customer)?

The one can be just as good as the other. But the second variant saves you two hours of time …

It is therefore good to make the following decisions every time when entering software:

1) Can I coordinate the determination of the figures with the customer? If so, choose that.

Consider, for example, the example of the participation as mentioned above.

2) Does the import of an asset or income component have a material effect on the outcome of a financial plan?

Consider, for example, the 4 single-premium policies that a customer concluded from 1994 to 1998. Posts that are not material, but that cost time with claws.

3) Can I summarize certain assets?

For example, consider the real estate portfolio of a customer. You can specify this down to the euro in your presentation or report, per property. But it is better to present the real estate portfolio as a total item (so for example  Other real estate: EUR 2,342,000).

Does this mean that you have to forget the details?

No of course not.

Because every small change in the software can have a substantial impact on the outcome.

But please handle it with a healthy common sense when you enter the software.

It saves you a lot of time.

And so it delivers more for you and probably also for your client.

See you soon!

Let’s make financial planning matter!

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