Milestone planning helps clients and advisers

Many milestones in life are brought on by the client's own goals, but other major events are driven by tragic situations

Jun 26, 2019 @ 2:24 pm

By Jamie Hopkins

New trends and developments are always on the horizon in the financial planning industry. For the past few years, the focus on retirement income planning has been growing and taking the country by storm.

The growth and integration of financial planning software and robo-advisers also has been a fascinating trend. But it's just the tip of the iceberg of technological disruption in financial services. As advisers try to keep up with emerging trends while still showing their value to clients, a new focus could be arising: milestone planning.


Milestone planning is a significant part of many project management and planning teams. The idea is that you project what you're supposed to achieve by a preset date. As you pass milestones, you can review whether or not your plan is on track.

Not only does the process give the planner the ability to evaluate the plan's performance, it also can provide a good history of the project once it's complete. Because milestone planning focuses on the most visible, important and easily identifiable events, it allows focus and planning to develop around them.

(More from Hopkins: What 'Avatar' and 'Avengers' can teach advisers)

It's easy to see how these project management themes can be incorporated into the financial planning process. The top financial Google searches, for example, revolve around guidance for milestone events: How to pay off a student loan, what is a 401(k), how do car loans work, how to buy a house, etc.

Many clients experience a similar need for guidance toward and past milestones. For instance, young clients go through significant life events such as starting a new job, opening a 401(k) account, paying off student loans, getting married, having children and buying a house.

Once a client is a bit further into their work career, they might need an adviser's help with starting a business, saving for children's college funding or deciding when to retire. Retirement clients also will have milestones like relocation, long-term-care needs and end-of-life planning.

Many milestones in life are brought on by the client's own life goals, like marriage, having children and starting a business. But other milestones will be brought on by loved ones, like children going to college or getting married. Other major life events are driven by tragic situations, like the loss of one's parents or spouse. These major life events will have a huge impact on the client's lifestyle and financial situation.


Financial advisers often start with goal-based planning: what the client wants to accomplish. This is just a start, though. This goal-based aspect of planning is lost along the way as the focus becomes more tactical in nature. Milestone planning can be beneficial in keeping the focus squarely on the client's goals.

Research has shown that clients who spend more time thinking about future goals and events are more likely to feel a connection to their future self. Therefore, they are more likely to follow through on savings goals for the future.

By planning around milestones in a person's life, an adviser is given the opportunity to discuss both what the client wants to happen and some of the external risks involved. While the timing of these risk events is unknown, they will occur. People pass away, retirement happens, sickness happens — we need to be prepared for external changes that'll affect our financial plan.

(More from Hopkins: One retirement risk few people talk about)

Milestone planning also allows the adviser to show additional value without it being directly tied to investment gains and losses from each year. Instead, the value is accompanying a client on a journey to help them conquer life challenges and meet goals — a huge shift in the client-adviser paradigm. Previously, advisers focused on product and investment. Under milestone planning, advisers focus on a whole life and building a relationship.

Annual reviews can include a look back at positive milestones clients have passed over the years. Advisers and clients alike will have a clearer picture of the importance of their relationship and the value of advice the client is paying for. Everybody wins, right?

Milestone planning helps companies around the world accomplish big goals every day. Why shouldn't it be the same for financial advisers? Take a page from project management and consider focusing on milestone planning.

Jamie Hopkins is director of retirement research and vice president of private client services at Carson Group.


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