Waddell & Reed

Our Approach

We believe your financial plan must do a few things especially well to work for you:

  • Address what you care about most.
  • Be a plan of action that identifies your financial needs and objectives.
  • Recommend solutions to help you work toward your objectives and keep you focused on your goals.
  • Reflect the changes in your life over time.

A sound financial plan is much like a well-constructed home. It uses building blocks that provide support as you pursue your financial goals. Each building block – from cash flow to estate planning – will be prioritized and serve as a vital component to achieving your goals. Your advisor will look at:

  • Cash Flow – Analyze your existing cash flow and financial position. In this component your advisor will summarize and assess your income and expenses, key budgeting issues and your cash reserves for emergencies or other opportunities.
  • Risk Management – Identify potential risks – loss of health, property, income or life – and develop strategies to protect against each risk.
  • Accumulation/Investment – Invest for specific accumulation goals, such as education or home purchase. In this component your advisor will develop investment strategies based on your time frame and risk tolerance and recommend asset allocation.
  • Income Tax – Identify appropriate tax-savings strategies available for your specific situation.
  • Retirement – Evaluate your retirement needs and develop strategies for the accumulation and distribution phases of your life.
  • Estate Planning – Plan for your estate planning and wealth preservation needs, including strategies to ensure that your wealth is preserved and passed efficiently and cost-effectively to the people or organizations you wish, at the time and in the manner you want. If needed, additional elements in this process can include wealth forecasting, business planning and succession planning.

As you and your financial advisor work through your financial plan, it’s beneficial to understand the four basic lifecycle phases. In each lifecycle phase certain financial goals and objectives tend to become more significant.

During this stage, the financial goals and needs are likely to shift every time the individual’s life undergoes a significant change: marriage, the purchase of a home, raising children, building a career or business and, perhaps, paying off student loans and other debt. Early on, a significant change can make it financially difficult as earnings and financial resources are often low, while financial demands are high.

During this phase children have either left or are close to leaving the nest. In many instances, mortgage and other debt may be paid off by now. Normally you should be positioning assets for retirement and managing risk.

Those in the retirement group are typically focused on maintaining the lifestyle they’ve become accustomed to, perhaps traveling more or pursuing hobbies, managing their assets effectively and protecting those assets to ensure they last throughout their retirement years.

In the Legacy stage – less active retirees generally become focused on how to transfer their wealth in a cost-effective and tax-efficient manner. As the term suggests, these persons tend to be more concerned with the “legacy” they are leaving behind – not only from a financial standpoint, but also from the perspective of how they will be remembered and whether they have positively impacted the world around them.

Our experience has shown us that to do these things well, a successful financial plan must include three key elements:

Your financial plan begins with your financial advisor listening to you, asking questions about your current financial situation and identifying your goals and priorities. Your personal information creates the foundation of your plan.

Your financial advisor will review your information and prepare your individual financial plan. Based on your personal information and goals, your advisor will determine strategies that are best for you, propose solutions for your current needs and address your long-term goals.

Your personal financial plan is a blueprint to your financial future and can be used to measure your effectiveness. Taking action is the most important step of all. Your plan will tell you what actions to take and how to review and monitor your progress over the years.

A Successful Financial Plan Can Make You a Winner
Your plan puts you in control and in the know about your financial future. With a plan in place you will be able to:

  • Identify and define your financial goals and objectives.
  • Determine appropriate strategies and solutions that will help you work toward those goals and objectives.
  • Make informed financial decisions based on a plan of action that addresses your specific financial goals, concerns and needs.
  • Dovetail your plans with your other financial consultants (such as a tax and legal advisor) to remain focused on your short- and long-term goals.
  • Become proactive, rather than reactive, when addressing changes in your life, your tax situation, or economic and financial market conditions.
  • Enhance your family communications and understanding of overall financial goals.
  • Coordinate all the areas of your financial life.

Waddell & Reed, Inc. offers financial planning services in its capacity as a registered investment adviser. Consult your financial advisor for a breakdown of the fees associated with these services.

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