Provide clients with complex planning needs peace of mind

Snap Projections was thrilled to once again sponsor the annual IAFP Symposium. This year, the team conducted a Symposium Case Study deep-dive through a 2-part webinar series.

The Case Study, May The Wealth Be With You, can be downloaded here. This case holds some fairly complex planning topics, so we have broken the learning into two parts. The end goal is to learn how you can provide clients with complex planning needs peace of mind.

Over 500 Financial Advisors & Planners registered to attend these financial planning sessions which provided multiple CE Credits. Live attendance was required to be eligible for the Credit. If you are an Advisor in need of CE Credits one who enjoys financial planning tips to help you better serve your clients, you’re invited to join our community by opting in to your right.

Session 1 was about providing Advisors a baseline understanding of how to build simple projections using the Snap Projections financial planning software, in preparation for Session 2, where the full, complex projections for the clients were built.

The theme for Session 1 was Practice Growth: How to build a relationship with your client’s adult children. The focus was creating simple projections for the clients’ son, and help him work through planning to purchase his first home.

The theme for Session 2 was Relationship Management: How to Stress Test plans and provide your clients with peace of mind. The focus for this session was to help our clients work through multiple what-if scenarios to determine the best path forward, in spite of their many challenges and concerns.

Want to follow along? Canadian Financial Advisors, Planners, and Investment Managers are eligible to start a 14-day Free Trial of Snap Projections financial planning software.

Download the Symposium Case Study

Session 1 Intro

Practice Growth: How to build a relationship with your client’s adult children.

We are going to start with keeping it simple. The objective for this hour is to create the foundation so we’re able to do a deeper dive during our 2nd session, when we build out the full case study for Luke and Mara.

This session will focus on Ben Skywalker and explore how we can use Snap to quickly create simple projections and engage younger clients with financial planning, which includes your current clients’ adult children.

While Ben is still young, he has questions and concerns about his future. His questions today are:

• Where am I headed with what I’m doing now?
• How can I manage repaying student loans and work toward purchasing my first home?
• How can I start saving for my future, and what’s going to happen to my money if this market volatility continues?

During this hour, we’re going to meet Ben where he’s at and provide him with options, transparency, peace of mind, and an actionable plan to achieve his short-term and long-term goals.

Watch Session 1 Video

Base Plan Data Entry Details for Ben

Over the course of just 10 minutes, you will see the Base Plan created with the following data entry details.

1. Client
   1. Ben Skywalker
   2. Age: 19 (DOB: 2004/12/01)
   3. Province: Ontario
2. General
   1. Retirement Age 65
   2. Projection until Age 95
   3. Rates of return as 1%, 2%, 5%
3. Expenses
   1. Base Expenses of $24,000 for now (rent, groceries, transportation)
   2. Tuition $12,000 per year for age 20 and 21
4. Incomes
   1. $20,000 Part-time work (Employment Income) for Age 20 and 21
   2. $7,500 EAP (Other, Taxable) for Age 20 and 21
   3. $60,000 Full-time work (Employment Income) For Age 22 to 64
5. Assets
   1. Savings $4K 100% Cash
   2. TFSA $5K at 100% FI at 3.5%
   3. FHSA $0K at 100% FI at 3.5%
   4. RRSP $0K at 20%/80%
   5. TFSA Contribution room of $14.5K
   6. RRSP Contribution room of $14K
   7. FHSA Carryforward Contribution room of $8,000
6. Debts
   1. Student Loan of $15K at 0% with $500 monthly
      1. Debt averse due to experience watching family friend Han Solo over the years
7. Gov’t Benefits
   1. Set the Percent of Maximum at 65 to 80%.
   2. OAS we’ll leave as 65 and 100%.
8. Income Taxes
   1. $8,000 for federal tax credits for Ages 20 to 23
9. Personal Planning Page
   1. Additional updates:
      1. Borrow $9,000 for the next 2 years from the Student Loan. Explain Run Scenario in red
      2. Set the CFM Start Age to 2024

Multiple what-if scenarios for Ben

After the base plan is built, you will witness multiple what-if scenarios created to discuss options and further optimize the plan for Ben. Through this process, we will address his initial 3 financial questions, which again were:

• Where am I headed with what I’m doing now?
• How can I manage repaying student loans and work toward purchasing my first home?
• How can I start saving for my future, and what’s going to happen to my money if this market volatility continues?

Session 2 Intro

Relationship Management: How to Stress Test plans and provide your clients with peace of mind.

After watching Session 1, you should be ready for something a little more complex. Next, we will build out the full case study for our clients Luke Skywalker and Mara Jade.

In order to provide accurate and personal planning for clients with complex planning needs, we need financial planning software that is flexible enough to model our clients’ lives accurately. Because the truth is, Luke and Mara have a lot going on and they have some significant decision to make.

Their concerns today include:

• Luke and Mara are concerned about the volatility of their investment portfolio
• Luke’s workplace accident have impacted their lives greater and left them with disability considerations
• They would like to provide financial assistance to their friend Han Solo, and
• Their ageing parents are going to cause increased caregiving responsibilities

So how can we help?

Watch Session 2 Video

Base Plan Data Entry Details for Luke and Mara

Over the course of about 20 minutes, you will witness a more comprehensive base plan for this couple built in Snap Projections using the following data entry details.

1. Client
   1. Luke Skywalker
   2. Age: 55 (DOB: 1969/06/01)
   3. Province: Ontario
   4. Mara Jade
   5. Age 53 (DOB: 1971/07/01)
2. General
   1. Start Year 2025
   2. Retirement Age 61 and 59
   3. Projection until Age 98 for each
   4. Rates of return as 1%, 2%, 5%
3. Expenses
   1. Base Expenses of $100K
   2. JOINT FHSA Gift of $8K from 57 to 61 (for Luke)
4. Incomes
   1. Luke
      1. Disability Income of $60,000 Other, Taxable, RRSP No To Age 65 and then adjust the date to 2034-06-01
      2. AD&D Payout $110K (50% payout on 2x previous salary of $110K) Other, Non-Taxable, RRSP No Age 56 to 56
   2. Mara
      1. income of $120K to age 58
5. Assets
   1. Luke
      1. Chequing $120K 0% interest
      2. Savings of $0
      3. Joint Account $8K JOINT 100% Cash 0%
      4. Federal LRSP $35K 10% Cash / 20% FI / 70% Equity
      5. SK LIRA $160K 10% Cash / 20% FI / 70% Equity
      6. AB LIRA $85K 10% Cash / 20% FI / 70% Equity
      7. Spousal RRSP $480K 10% Cash / 20% FI / 70% Equity
      8. TFSA $130K 10% Cash / 20% FI / 70% Equity
      9. TFSA Contribution room of $7K
      10. RRSP Contribution room of $150K
      11. DCPP/LIRA/LIF tab to set Jurisdiction to Federal, Saskatchewan, and Alberta
   2. Mara
      1. Chequing of $7K 0% interest
      2. Savings of $15K
      3. Shares $150K 100% Equity
      4. IPP $800K modelled as an RRSP/RRIF 10% Cash / 20% FI / 70% Equity
      5. TFSA $125K 10% Cash / 20% FI / 70% Equity
      6. TFSA Contribution room of $7K
      7. RRSP Contribution room of $21,600
   3. Real Asset
      1. Home $2MM original cost of 1MM JOINT
6. Debts
   1. LOC $15K at 7% but Han Solo is currently covering the interest payments, so set as 0%. JOINT
7. Gov’t Benefits
   1. Luke
      1. CPP Start Age 65
      2. Set the Percent of Maximum at 65 to 70%.
      3. OAS we’ll leave as 65 and 100%.
   2. Mara
      1. CPP Start Age 65
      2. Set Percent of Maximum at 65 to 75%
      3. OAS we’ll leave as 65 and 100%.
8. Insurance
   1. Luke
      1. Term to age 61 $400K Premium 300
   2. Mara
      1. Term to age 59 $400K Premium 250
9. Education
   1. $50,000 balance
   2. Ben Skywalker 2004-12-01
   3. CESG of 5000
   4. 19 for 4 years
      1. $7,500 0%
10. Income Taxes
    1. Luke
       1. Disability Tax Credit
          1. $9,872 Federal
          2. $10,019 Provincial
11. Personal Planning Page
    1. Set the CFM Start Age to 2025.
    2. Enter $21,600 to the Spousal RRSP

Multiple what-if scenarios for Luke and Mara

Once that base plan is built, it’s time to start creating multiple what-if scenarios to model the potential choices our clients have ahead of them.

In addition to their initial concerns, which again were ..

• Luke and Mara are concerned about the volatility of their investment portfolio
• Luke’s workplace accident have impacted their lives greater and left them with disability considerations
• They would like to provide financial assistance to their friend Han Solo, and
• Their ageing parents are going to cause increased caregiving responsibilities

… we can also discuss and consider the difficulty of maintaining a rural property with the loss of Luke’s hand, and the financial impact of potentially needing to move closer to Anakin.

Next steps

Learn more about the SnapShot, the 1-2 page financial plan report shown at the end of both sessions.

Want to follow along? Canadian Financial Advisors, Planners, and Investment Managers are eligible to start a 14-day Free Trial of Snap Projections financial planning software.