What is a Comprehensive Financial Plan?

What is a Comprehensive Financial Plan?

Let’s start by clarifying that an Investment or a product is not a financial plan. 

Those, if well deployed, can, however, help you execute on your financial plan.

Technically speaking, a “Comprehensive Financial Plan” is a plan that encompasses your complete financial picture. 

It would cover areas such as investments, retirement and risk management.

Though this is technically correct, It still doesn’t tell you much about what it can do for you, your family and your future.

A Financial Plan Is a Road Map To Your Future

To put it simply, creating a financial plan is similar to planning a road trip over an extended period. This journey could look at five years, 10 Years, 20 years into the future and often longer.

A financial planner’s job is to help you craft your financial future by making the most of what you have today.

It Will Give You Perspective

Having a comprehensive approach to planning, will prevent you from “winging-it” and unknowingly sabotaging another area of finances. 

These could hinder you from living your best life. 

This happens because you likely have conflicting goals and objectives. 

For Example:


Answering these questions would require you to understand what you are giving up by focusing on a key area of your life.

Looking at the Rent or Own example, you may be giving up property equity by renting. 

However, without understanding, the alternative for the equity, you won’t really know what the better choice is for you.

If you rent just so you can buy a nicer car, it may not be as wise as renting so you can use your capital to start a business.

Answering these questions is extremely context-specific.

A Comprehensive Financial Plan Will Integrate With You and Your Life

A Comprehensive Financial Plan Will Integrate the following areas of your finances into cohesive and harmonious steps:

  • Goal and Life Planning
    Understanding your, short term, intermediate-term and long term financial goals will uncover “the why” behind your investments and savings activities.

    These could be rooted in wanting to start a family or gifting assets to the next generation. Either way, these goals and dreams are uniquely you.

  • Cash-Flow and Debt Management
    Cash-flow will fuel your financial plan, without managing your income and your expenses, you can’t implement your financial plan properly.

    Reducing the cost of capital or interest could save you tens of thousands or hundreds of thousands in your investing life.

  • Investment Planning
    As mentioned earlier, an investment is not a financial plan. However, when investments are based on a comprehensive plan, you are able to match your investment choices to your financial goals, your risk tolerance and capacity and your investment time horizon.
  • Retirement Planning
    Carefully structuring your investments so that you can eventually reach a “work-optional” lifestyle is great. However, this requires planning around your sources of income. The sequence of withdrawals from your accounts can determine how long and how comfortably you can retire. 
  • Education Planning
    The cost of post-secondary education continues to skyrocket. Whether you are planning for your kid’s education or continuing education for yourself, requires careful planning and proper funding. 
  • Risk and Protection Planning
    What’s the use of working hard towards building wealth if the fruits of your labour could easily be snatched away? Proper income protection and asset protection plan will help keep you on track when life happens.
  • Giving and Estate Planning
    Those who are self-made, start working for survival, then success, but eventually that translates to creating significance. Having a properly planned giving strategy will multiply your ability to leave an inheritance or a charitable bequest.
  • Career and Business Planning
    Your biggest asset is your ability to earn an income. Helping you maximize your earning power at work or in your business will have a far greater impact than investment performance. Focusing on this would often provide you with the quickest return per action.
  • Tax Planning.
    Tax Planning on its own could be dangerous, but when added as a pillar to your financial plan, we can make sure your money is working harder for you, than the taxman.

So How Do You Tell If You Have a Good Financial Plan or Financial Planner?

A Successful Financial Plan Should Give you a sense of possibility; it should empower you to take action. It should be realistic in its recommendations, plans that ask you to commit to actions which would require you to suffer will be tough to follow through.

A Successful Financial Plan Has Your DNA. You must be truly involved in its creation; it can’t be pumped out by a software simply focusing on benchmarks.

A Successful Financial Plan Evolves With You. It must be agile and flexible enough to adjust to your changing life. A printed plan is of no value when compared to the act of planning because life happens. 

Want to Get started?

Work With a Fee Based Financial Planner In Calgary.

Hervin Pesa, CFP- Financial Planner Smiling

If you’ve always wanted to take charge of your finances but life has just gotten in the way, you might just need a little help.

I’m a Calgary based Certified Financial Planner and I’ve been helping Calgarians build and protect wealth since 2012.

Book a complimentary financial fitness session with me by clicking the button below.