Financial experts talk financial planning and the need for a solid strategy

Many new clients of Lancaster-based Domani Wealth looking for help on their financial or retirement plans bring with them what the financial advisement firm’s CEO calls ‘back of the napkin thoughts.’

“It is surprising how many individuals haven’t taken the time to do a retirement or a financial planning model,” said Thomas Williams, partner, senior wealth advisor and CEO at Domani Wealth. “They probably did some thinking on their own but in terms of putting numbers down and thinking through all of the possibilities, it takes time and its most likely time that they haven’t devoted.”

Williams has worked at the firm for 24 years and in that time, he’s seen that most people don’t give formal thought to the kind of money they should be saving.

Domani works with clients to build those plans and identify the risks they may have as they continue to work toward retirement or build savings in case other challenges arise. Risks like not having up to date estate documents and having one spouse in a marriage that is the majority wage owner are hazards that someone at any caliber of income can experience, Williams said.

Plans that are done without help from an adviser can also fail to take something like the possibility of long term care into consideration.

“People look at their financial plan and their accumulation of wealth but they don’t consider what would happen if one of them had to go to a long term care institution or get care at home,” Williams said, adding that many clients also ignore how severely inflation can impact a retirement fund. “Even if you look at inflation at 3% that gets pretty big in 25 years.”

Other financial institutions also make leeway with their clients who have yet to solidify their future plans by acting as financial ‘quarterbacks’ said Kevin Eisenhart of York-based CPA firm Eisenhart & Co.

Eisenhart & Co. leaves investment and retirement planning to other organizations but Eisenhart said that he and his staff are keen on helping their clients get to where they need to be in their planning.

“We can make recommendations about things we’ve seen, talk to our clients about saving retirement and if they are a business owner we may tell them to start saving for retirement,” he said.

If a client does come to Domani with past work from other financial advisers, their estate plan could be 10 or 15 years old, which can also pose a problem if a trustee has passed away or a friend of the family has moved out of the area.

With his clients that are business owners, Williams said owners can be so focused on their business that they ignore the personal side of their finances.

A business owner may not have prepared a power of attorney in case something were to happen that they couldn’t manage the business anymore or a buy/ sell agreement to manage their share of the company if they were to die prematurely.

“We find that there has been a lack of succession planning,” Williams said. “The owner dies or is incapacitated and the question is what now? We find that it is not often that there has been thought given to succession, with the business identifying a person or a team in position to run the business.”

When planning for retirement or for a potential accident, the planning phase is a continuous process and not an event, he said.