Do You Have a Master Wealth Plan?

Kathy and John realized their long planned retirement days would have to be postponed. Two events caught them by surprise: Their substantial portfolio had lost nearly one third of its value and Kathy’s mother, who watched her wealth disappear in the financial meltdown, suffered a debilitating stroke, which required 24-hour care. Like many people, Kathy and John never had a master wealth plan.
Just as successful institutions make every financial decision based on a specific master plan that outlines their focus on what they can control and what may impact their financial security, every person should have a master wealth plan as well.

Your master plan is the product of an honest conversation about where you are today and where you are going. It’s a living document that lays out assumptions about your future and helps you focus on the factors that you can control today. Equally important, your plan assumptions are continuously reassessed over time.

Your master plan demonstrates the impact and consequences of every decision and helps you make the appropriate trade-offs based on what you value most. It helps you prepare for and adjust to foreseen and unforeseen events in your life and in the financial markets.

A master wealth plan has four steps:

1. Identify your financial life goals.
Oftentimes, couples don’t know each other’s goals or they don’t have the same goals. Through candid discussions, couples begin to align their goals as they understand each other’s objectives. A private wealth counselor works to help the couple identify and clarify their goals and aspirations, which is the foundation of the master plan.

2. Understand the five financial control factors.
There are five aspects of your financial life, which you can control and which become the basis for your master plan assumptions. These assumptions may change as you pursue your lifestyle and long-term goals. The control factors are:

• Spending – lifestyle level you wish to maintain
• Savings – money dedicated for investment
• Timing – when you want the event to occur
• Risk – the level of volatility in your investment portfolio
• Legacy – assets you want to transfer to heirs or maintain as a safety net

3. Measure the probability of success.
To measure the likelihood of your plan’s success, a private wealth counselor will use advanced scenario analysis software that considers thousands of simulations of “financial lifetimes” with inputs of actual and hypothetical historical market performance. These scenarios include optimistic and pessimistic circumstances that have never occurred in the markets’ history, which demonstrates your plan’s ability to withstand the unexpected.

4. Make adjustments along the way.
Your plan is a living document that should be consistently updated to ensure its effectiveness over time. Unexpected changes can influence financial situations and decisions. These include changes in the tax code, a sudden rise in inflation, an inheritance or unforeseen illness, all of which require a review of your master wealth plan and adjustment of your control factors.

Don’t let the volatile financial market or life’s events catch you by surprise. By having a master wealth plan, you ensure that your goals, which you’ve worked hard to achieve, will occur as planned.

Kelly Trevethan CIMA is a Managing Director at United Capital Financial Advisers, LLC, a private wealth counseling firm with more than 80 offices around the country. He can be reached at (415) 418-2101 or at

Investing involves risk, including possible loss of principal, and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. The information contained in this piece is intended for information only, is not a recommendation to buy or sell any securities, and should not be considered investment advice.