Some planners, especially with regard to retirement planning, are taking a so-called "holistic approach" to counseling clients. A great deal of time may be spent exploring the individual's lifestyle, what makes them happy, and how they picture the "perfect" retirement. Although some write it off as a touchy/feely approach to win over the client, others see distinct benefits, including greater plan buy-in, and an all-important marrying of the client's financial and non-financial goals.

No Exact Definition

Holistic financial planning seems to have no universally agreed-upon definition, and the concept seems to be evolving, both in terms of the context of comprehensive financial planning and in incorporating life planning into the financial planning process.

Robert Greenberger, tax principal with Tauber & Balmer in Atlanta, views holistic financial planning as an overall approach that often includes other professionals in providing services that encompass investment planning, retirement planning, and estate planning. "An advisor can't adequately provide estate planning recommendations without knowing the individual's retirement needs. Their retirement needs will have an effect on the remaining size of their estate, which, in turn, will dictate various estate tax planning strategies. The estate goals, such as how much they would like to leave to beneficiaries, in turn have an effect on investments and retirement planning. Likewise, an advisor needs to know a client's retirement needs to help formulate an investment strategy. All three areas are intertwined, and must be understood by the advisor: What are the client's goals? What people and charities do they want to take care of? What are their cash flow needs before and during retirement? What is the client's investment philosophy and risk tolerance?"

If a business owner is involved, Greenberger believes an advisor can't provide meaningful financial planning advice without understanding both the goals and expected revenue stream from their client's closely held business and the family unit, specifically "family" needs that are anticipated for this generation and the next.

Ira Herman, partner and national director of trust and estate practice at J.H. Cohn, Roseland, N.J., describes holistic financial planning, or "whole-life" planning, as an overall approach that combines both financial and social planning components to ensure clients' portfolios are well aligned with their values. "It is a continuous, life-long process that requires active involvement and input from clients and helps achieve progress with life goals, manage risk, secure retirement, support charitable and social causes, transfer assets between generations, and achieve and maintain sustainable financial independence. Importantly, it helps ensure decisions made to create wealth will better reflect the individual's values," Herman explains. He believes that in many ways holistic financial planning incorporates what has been known as comprehensive financial planning, but includes more of the client's social and personal vision/goals in the process.

Susan Galvan, co-founder and managing partner of the Kinder Institute of Life Planning in Pleasant Hill, Calif., sees a financial planner as having "a unique role in advising and working with the client both in terms of their resources and how they can be applied to what matters most in their lives." She believes this allows for a holistic approach, looking at the whole picture and how all the elements can work together most beneficially. Galvan sees a big difference between looking at money goals, rates of return, and asset allocation versus what is a client going to do with the money.

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