8 Essentials that Differentiate Holistic Financial Planning from Traditional Financial Planning

Traditional financial planning often revolves around intermediating services provided by financial advisers. Holistic financial planning, however, offers a broader and deeper approach. Here, we explore eight features that distinguish holistic financial planning from its traditional counterpart.

1. Authenticity Holistic financial planning begins with a process of self-discovery, often called values-based financial planning. Planners help clients identify what is truly important to them and align the financial plan accordingly. This ensures clients live authentically and true to themselves, rather than following a plan imposed by others. This authenticity fosters integrity and self-alignment, a concept we refer to as WISDOM.
2. Purpose A holistic planner helps clients uncover their talents and use them to serve others, defining their life purpose. This approach makes clients feel useful and fulfilled, driving their daily actions and contributing to their overall well-being. We call this driving force WILL, as it gets clients out of bed in the morning and allows them to end each day with a sense of accomplishment.
3. Passions Traditional planners may not prioritise understanding the purpose behind their clients’ money. In contrast, holistic planners focus on establishing life goals where purpose intersects with passion. By asking what clients love and what lies at their heart’s core, holistic planners ignite a spark of inspiration that drives the planning process from start to finish.
4. Holistic Well-being Financial well-being is incomplete without considering physical, mental, emotional, and spiritual well-being. Holistic financial planners take into account all forms of assets, not just financial ones. They create strategies for human capital development, assessing physical assets (skills, location), mental assets (know-how, eustress), emotional assets (social connections), and spiritual capital (conscience, character). Financial well-being forms the foundation of holistic well-being, emphasising that without overall well-being, financial security is unattainable.
5. Productivity Traditional financial planners focus on saving money already earned. While savings are important, holistic planners also create strategies to grow wealth through productive assets, ensuring earnings longevity and resilience. They leverage entrepreneurial opportunities to create sustainable livelihoods, viewing human capital as the present value of future earnings and total wealth as a combination of financial capital and human capital minus lifetime liabilities.
6. Total Wealth Traditional financial planners often concentrate on investable assets under their influence. Holistic planners, however, consider all financial assets, including property, pensions, businesses, and more. They calculate the present value of liabilities from the client’s desired future and ensure sufficient total wealth to support it.
7. Longevity Traditional financial planners may make assumptions that optimise their earnings through product intermediation and asset management fees. Holistic planners, however, consider the entire well-being of the client and determine the true retirement point based on when the costs of earning outweigh the benefits. This approach often results in flexible, phased retirements, allowing clients to enjoy financial surpluses throughout their lives, such as taking mid-life sabbaticals or career breaks to raise children.
8. Legacy Traditional financial planners often focus on helping clients live their best lives with their existing money, with self-actualisation as the ultimate goal. Holistic planners, on the other hand, recognise that life’s purpose extends beyond self-actualisation to self-transcendence. By integrating human capital considerations, holistic planners aim to provide the best life for clients and others, utilising both existing and potential financial resources. This approach aligns with the client’s values, purpose, and inspiration.

These eight features illustrate how holistic financial planning differs from traditional methods. At the Academy of Life Planning, we teach these unique skills, offering accreditation and mentorship to help you build a successful holistic financial planning business without intermediating products. True holistic financial planning emphasises non-intermediation to avoid conflicts of interest and promote market integrity.

If you are interested in learning these new planning skills, which go beyond traditional financial planning courses and professional accreditation programmes, join our membership and mentorship programmes to revolutionise your financial planning practice.

Q&A: Understanding the Essentials of Holistic Financial Planning

Q1: What is the primary difference between traditional and holistic financial planning?

A1: Traditional financial planning focuses on financial products and intermediating services provided by advisers. Holistic financial planning, however, encompasses a broader approach that integrates personal values, life purpose, and overall well-being, considering all aspects of a client’s life, not just their financial assets.

Q2: Why is authenticity important in holistic financial planning?

A2: Authenticity ensures that clients live true to themselves by aligning their financial plans with their core values. This approach helps clients live with integrity and avoid following plans imposed by others, fostering a sense of self-alignment and authenticity.

Q3: How does holistic financial planning define life purpose?

A3: Holistic financial planning helps clients uncover their talents and use them to serve others, which defines their life purpose. This approach makes clients feel useful and fulfilled, driving their daily actions and contributing to their overall well-being.

Q4: Why do holistic financial planners focus on a client’s passions?

A4: By understanding and integrating a client’s passions, holistic financial planners establish life goals where purpose meets passion. This approach ignites a spark of inspiration that drives the planning process, ensuring that the client’s financial plan is both meaningful and motivating.

Q5: How does holistic financial planning address overall well-being?

A5: Holistic financial planning considers all forms of well-being—physical, mental, emotional, and spiritual. Planners create strategies for human capital development, assessing various assets beyond just financial ones, ensuring that clients achieve comprehensive well-being.

Q6: What is the approach of holistic financial planning towards productivity?

A6: Holistic financial planners create strategies to grow wealth through productive assets, ensuring earnings longevity and resilience. They leverage entrepreneurial opportunities to create sustainable livelihoods, viewing human capital as the present value of future earnings and total wealth as a combination of financial and human capital.

Q7: How do holistic financial planners view total wealth?

A7: Holistic planners consider all financial assets, not just those under their influence. This includes property, pensions, businesses, and more. They calculate the present value of liabilities from the client’s desired future and ensure sufficient total wealth to support it.

Q8: How does the concept of retirement differ in holistic financial planning?

A8: Holistic financial planners determine the true retirement point based on when the costs of earning outweigh the benefits, considering the client’s overall well-being. This approach often results in flexible, phased retirements, allowing clients to enjoy financial surpluses throughout their lives.

Q9: What is the ultimate goal of holistic financial planning regarding legacy?

A9: The ultimate goal of holistic financial planning is to provide the best life for clients and others, utilising both existing and potential financial resources. This approach aligns with the client’s values, purpose, and inspiration, extending beyond self-actualization to self-transcendence.

Q10: How does the Academy of Life Planning support the development of holistic financial planners?

A10: The Academy of Life Planning offers unique skills training, accreditation, and mentorship programmes to help build successful holistic financial planning businesses. These programs emphasise non-intermediation to avoid conflicts of interest and promote market integrity, revolutionising the financial planning practice.

For further details, contact the Academy of Life Planning.