Chris Budd: The Emergency Financial Plan

Financial planning is a time-consuming process over many meetings. It needs questioning, contemplation, investigation, consideration.

It’s not a process you always think of as part of the emergency services.

I imagine the paramedics in their ambulance, followed by the Blood Bank motorcyclist, followed by a five-series BMW. They arrive at the scene and immediately start asking questions.

“Is the patient breathing? »

“What blood group is the patient?” »

“When was the last time the patient had a pension review?”

The emergency pension

I once had an emergency retirement situation.

It was a Sunday afternoon. A client called from the hospital. They were with a friend who was literally hours away, and his wife. They had not completed a death benefit nomination form for their defined benefit pension plan and did not know which boxes to tick.

It’s fair to say, however, that financial advisors are rarely needed in an emergency.

The exception to this, however, may be cash forecasting.

A clear path

One of the five financial wellness pillars of the Financial Wellness Initiative (IFW) is having a clear path to identifiable goals.

I’ve been promoting the use of coaching skills for counselors for about a decade now. Listening and questioning skills enable counselors to help clients identify their goals.

The cash flow forecast then plots the path to those goals. The review then focuses on pursuing that path – or reassessing the goals.

Sometimes, however, this reassessment can happen with great suddenness.

emergency cash

Because there was a client that I knew several years ago, we will call Sébastien. He was a consultant surgeon and extremely good at his job. So good that he was on different committees and boards of different NHS trusts.

According to his estimate, he worked an average of 100 hours a week. He returned home around seven o’clock in the evening, spent a few hours with his family, then returned to study at ten o’clock, worked until 1 o’clock in the morning, then got up at six o’clock to return to the hospital.

Then Sebastian had a heart attack.

After an operation and a period of recovery, he was ready to return to work.

And then he had a panic attack. He was afraid that returning to his old stress level would lead to another heart attack.

Sébastien would not normally have thought of contacting a financial planner at such an urgent time in his life. However, by chance we were talking at a friend’s fiftieth birthday party, and I asked him how much he needed to earn. He couldn’t answer the question.

Interestingly, he said he do have a financial planner. They had met for a checkup since the initial heart attack. I asked if the financial planner had prepared a cash flow forecast. Sebastian responded by asking what a cash flow forecast is. I respectfully suggested that he didn’t have a financial planner; he had someone looking after his investments.

I explained the cash flow process and how it would allow him to determine the income he would need to earn, which could allow him to do a much less stressful job. I outlined this clear path to identifiable goals and explained how the process would actually help him figure out what those goals might be and what options he might have.

Sebastian made an appointment to come and see us the next possible working day.

I might even go so far as to say that financial planning – that is, financial advice focused on his well-being, not just his money – saved Sebastian’s life.

If he hadn’t been forced to slow down and think about different options, rather than just pushing forward assuming he had to earn as much as possible, he might well have suffered a second heart attack.

Financial planning, when aimed at helping a client be happier, not just wealthier, can truly make a huge difference in your clients’ lives.

Chris Budd is President of the Financial Wellness Initiative