Using the 'Compare Plans' Feature in Timeline Planning

Everything you need to know about creating and comparing different plans in Timeline

Gonzalo Podgaezky Folguera avatar
Written by Gonzalo Podgaezky Folguera
Updated over a week ago

Summary

  • The 'Compare Plans' feature in Timeline Planning enables financial advisors to present and compare different financial strategies on a single screen, showing the value of advice.

  • It allows advisors to demonstrate various trade-offs between different plans, including riskier allocations, provisions for extra care in later life, early retirement scenarios, and optimized withdrawal and investment strategies.

  • For example, advisors can create two plans, a 'High-Risk Investment Plan' and a 'Conservative Investment Plan', to show clients the trade-offs between potentially higher returns and increased risk.

Description

The 'Compare Plans' feature in Timeline Planning is a powerful tool that allows you to compare and present different financial planning strategies on the same screen in front of the client. You can have powerful conversations and show the value of your advice by demonstrating various trade-offs between different plans, such as riskier allocation, extra care in the later phase of life, early retirement, and optimized withdrawal and investment strategy.

Here's how to use it to deepen your client conversations and help them make more informed financial decisions.


High-Risk Investment Plan Example:

Suppose you are advising a client torn between investing heavily in higher-risk assets for potentially higher returns or sticking to a conservative investment plan with lower potential returns but less risk.

You can create two separate plans - a 'High-Risk Investment Plan' and a 'Conservative Investment Plan'. The 'High-Risk Investment Plan' should include a portfolio heavily weighted towards high-risk, high-return assets. In contrast, the 'Conservative Investment Plan' should include a more balanced portfolio, with a higher proportion of low-risk assets.


After setting up the plans, you can click the 'Compare Plans' option on the left navigation menu and select the Plans you want to compare. This will allow the client to visually comprehend the potential outcomes of both plans side by side, making the discussion more tangible and understandable.

Early Retirement Plan Example:

Suppose you have a client considering early retirement and wants to understand the financial implications of such a decision.

You can create two plans - 'Standard Retirement Plan' and 'Early Retirement Plan'. For the 'Standard Retirement Plan', use the typical retirement age (say, 65) and set up the income, contributions, and expenses as usual. For the 'Early Retirement Plan', adjust the retirement age to the earlier desired age, which will adjust when contributions stop, and withdrawals begin.

Use the 'Compare Plans' feature to place these plans side by side. This will visually demonstrate to your client the possible financial outcomes, such as how early retirement might affect their success rate, end legacy, and overall financial stability in their retirement years.


Tax-Efficient Withdrawal Strategy


Let's consider another scenario where your client wants to understand the difference between standard and tax-efficient withdrawal strategies.

Create two plans – 'Standard Withdrawal Plan' and 'Tax-Efficient Withdrawal Plan'. In the 'Standard Withdrawal Plan', the withdrawals are set to occur evenly from all accounts. For the 'Tax-Efficient Withdrawal Plan', go to Settings > Account withdrawal order and adjust the settings to reflect a strategy where withdrawals are made first from taxable accounts, then tax-deferred accounts, and finally, tax-free accounts.

By comparing these plans, your client can see the potential long-term tax savings and how a tax-efficient strategy could extend the longevity of their portfolio.

Conclusion


The 'Compare Plans' feature is a potent tool that empowers you to offer a more comprehensive service to your clients. As you guide them through their financial planning journey, this feature helps you present complex financial concepts more easily and show the value of your advice.

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