Start the New Year with a New Financial Outlook


As 2015 winds down and millions of Americans begin preparing for 2016, many will make all sorts of New Year's Resolutions. According to an early 2015 Nielsen survey, a quarter of Americans resolved to get their finances in order by saving more and spending less. However, a 2012 Time magazine article suggests that the resolution to get one's financial house in order is one of the most frequently broken resolutions, and with good reason. Most Americans are no more prepared to analyze the many moving parts and unseen variables of financial planning than to overhaul the transmission of their car or perform an appendectomy on themselves.

David Edwards, a wealth advisor with 25 years experience taking care of the financial lives of families, observes, "People must take a proactive approach to managing their finances and preparing for goals such as education for their children, retirement for themselves. The necessary work seems so complex, with so many decisions, that most people retreat to doing nothing; yet live in fear that their goals won't be achieved. 

The team at Heron Financial Group | Wealth Advisors worked diligently over the last year to bridge this expertise gap with a process called "Joyful Financial Planning," which combines the best available financial planning technology with the human touch and experience of David Edwards and the advisors at Heron Financial Group. "We created 'Joyful Financial Planning' to help our clients overcome their tendency to procrastinate," says Edwards. "Our clients have 10,000 choices. We can show the clients which 10 choices matter to them and help them pick the best three. In so doing, we convert clients' fears to joy! 

Joyful Financial Planning

The most tedious part of financial planning is accumulating the necessary documents and figuring out monthly income and expenses: Heron streamlines this process by asking prospects to fill out a concise questionnaire which provides a general sense of the family's situation. The prospects then connect investment accounts, checking, savings and credit cards, real estate, mortgage and insurance policies directly to the digital advice aggregation platform. This tool is licensed from eMoney, used by 25,000 financial professionals to manage $1.4 trillion in assets for one million end-clients. Heron advisors create a draft financial plan to help the prospect "visualize" their future, much as architectural renderings allow a client to visualize a house.

The Heron advisor and the prospect perform "what if" analysis such as, "what if we retire at 62 instead of 65?" or "what if we buy second home?" The client can also see the likely growth of their assets between now and retirement and determine whether their current savings rate is adequate to provide the future income stream that supports their post-work lifestyle.

"From good data come good decisions," Edwards comments. "Clients care most about four things: First, what are their overall assets and liabilities? Second, what does their cash flow look like over the next five years? Third, what will their cash flow look like the year they retire (and if they need to save more or less)? Lastly, what can they expect with respect to estate taxes? When we can see how a client is invested across all his or her accounts, we can take investment planning to a whole new level." 

Edwards produced a video Can joy replace fear in financial planning?  Find out in nine minutes! to show how the technology is used in practice.

Investment in technology creates opportunity in "age-based account minimums."

"Historically, my team and I served high net worth clients who have multiple investment accounts and complex situations to manage," said Edwards. "Good advice is expensive. Reasonably speaking, we could only work with clients bringing at least $1 million in investable assets. Meanwhile, we lost the opportunity to serve 'HENRYs,' clients who were 'High Earning, Not Rich Yet.' Typically these prospects were younger, often the adult sons or daughters of our current clients. Deploying our digital advice platform allowed us to sharply reduce the costs of working with younger clients while delivering information on their terms, directly to their phones."

In September 2015, Heron established age-based asset minimums to serve HENRYs. Heron maintains a minimum of $1 million for individuals and families 50 and older, $500,000 for those between the ages of 45-49, $250,000 for clients aged 35-44, and no minimum for individuals and families younger than 35. For larger accounts, Heron maintains traditional fees computed as a percentage of assets under management. For smaller accounts, Heron implemented a monthly subscription financial planning fee that ranges from $99 per month for individuals, $199 per month for couples and $299 per month for families with dependents

"The next generations of savers and investors need professional guidance and advice sooner rather than later," Edwards said. "By getting to know younger clients at the start of their careers, we lay the foundation to handle the more complex scenarios that typically emerge over time. We are delighted that today's technology allows us to serve a broader swath of people than was possible in the past."