Your Financial Plan is Your Personal Battle Plan

A Guest Blog by Stephen Browne
Voyant Financial Planning Software

With the launch recently of “The Darkest Hour”, the movie about Winston Churchill’s first few weeks as Prime Minister during World War 2, I couldn’t help but reflect on the similarities between financial planning and war.

Wars are won and lost by clever generals. Irrespective of the external factors that actually caused the war, they never just wander into it and start fighting. Instead they carefully consider all of the external factors that will impact their success – the strength and condition of their enemies, the conditions and terrain on which the war will be fought as well as the weather and other factors that have the potential of impacting their success.

Of course, the key factor that they consider is the strength and capability of their own forces; the size of their army, the technology available to them and how it compares to their opposition. In short, they take a very strategic approach to the battle. Generals also know that battle conditions are an ever-moving feast. The battle conditions change, the strength of their own army and that of their enemy change and of course progress towards their overall goals either improves or recedes. As part of this, they consider the risk attaching to different tactical options open to them – do they risk lots of men and equipment for a particular short-term strategic objective, or do they wear down their enemy through sustained and slower-moving fighting?

This is where their real expertise comes to bear, adapting to changing conditions. This is also where disastrous mistakes are made. Consider the decision taken by the German generals in World War II who decided, in the Battle of Britain, to stop bombing airfields and instead to start bombing cities. This gave the Allies valuable time to rebuild their air force and fight back. As the German advance stalled later in the war, the Allies planned and executed D-Day, the ultimate turning point in the war. Clever generals achieve their country’s goals and win wars.

Successful financial advisers help their clients achieve their goals and achieve financial independence. In my experience, Metis Ireland does this in the exact same way as generals go about their job using one of their best strategic resources – Voyant’s sophisticated but user-friendly financial planning software.

Metis Ireland first of all seeks to understand what the objectives are: what is the desired end state or outcome? They consider risk and how much is appropriate for each individual client and their family and their unique situation. All of the current external conditions and, most importantly, the current financial strength of the clients are carefully considered. All of this is then evaluated and captured in the financial (battle) plan to get the client towards their final objective.

You cannot predict all outcomes – no one can. Churchill once said that “war is mainly a catalogue of blunders“. Reacting to new conditions is the key to success. The markets for instance change on a minute by minute basis. The skill of the adviser is to know when to act and maybe more importantly when not to act. Quite often the best financial advice is to do nothing.

Of course the real strength of true financial planning, just like a general’s, is that you recognise that the battle has now only just begun. From the day you have a financial plan, conditions start to change – in the external environment, your own circumstances or indeed the end objective. The real value of your financial planner is in the ongoing evaluation of these changes and the adaptations and tweaks that you make to your plan and the tactics that you’ve deployed to achieve their end goals.

Sitting at the heart of this is your future cashflow plan, as this clearly demonstrates your current and future financial firepower to achieve their ultimate objective – a bit like winning the war… You will see whether you need to take more risk, strengthen their resources (save more money) or maybe rein back their ultimate objectives ( similar to seeking a peace deal)!

So if you are unclear about the value of a financial plan, it might be time to listen to a good war story!

Stephen Browne holds the exclusive Irish distributorship for Voyant Financial Planning Software, the leading software of its class in the UK and Ireland. Over 50% of CFP qualified advisors in the UK and Ireland use Voyant to help them impact their client decisions and increase their own productivity. He is a student of financial planning and believes that it is the most important profession of our time.

Disclaimer

Metis Ireland Financial Planning Ltd t/a Metis Ireland is regulated by the Central Bank of Ireland.

All content provided in these blog posts is intended for information purposes only and should not be interpreted as financial advice. You should always engage the services of a fully qualified independent financial adviser before entering any financial contract. Metis Ireland Financial Planning Ltd t/a Metis Ireland will not be held responsible for any actions taken as a result of reading these blog posts.