Mastering the One-Page Financial Plan

What is a One-Page Financial Plan?

Invented and popularized by Carl Richards, the creator of the Sketch Guy column and a contributor to the New York Times, a one-page financial plan is an alternative method to help certified financial planners (CFP) relay their advice in a simple way.

Through his book in 2016, aptly titled “The One-Page Financial Plan,” Carl Richards has convinced various financial advisors to switch to this simplified method of communicating everything clients need to know to make sense of a financial plan.

As its name suggests, the one-page financial plan swaps out bulky reports, filled with financial jargon that clients don’t care much about, for a summarized version that clients can understand intuitively.

To make informed financial decisions, your clients need to fully understand their financial life.

However, this doesn’t mean overwhelming them with jargon, stats, and the nitty-gritty analysis methods you use during the planning process. Oftentimes, this means delivering what they need to know in a form they’re familiar with. While a detailed report is sometimes necessary, your clients only need the big picture to move forward in most cases.

The one-page financial plan focuses your discussion with clients on the two things they want to know — their financial situation and the next steps to achieving their financial goals. It contains everything you need to facilitate a successful conversation. 

The Benefits of a One-Page Financial Plan

A one-page financial plan benefits both you and your clients. Here are a few main ways you — and your clients — can benefit from consolidating the important information into a single page.

Saves time prepping for client presentations

The traditional deliverable (a 20-plus-page report with in-depth information) might backfire. Some clients aren’t interested enough in the technical details and will only skim the first few pages — despite the hours you put into creating the report.

These reports take ages to assemble, which means updating them with new information takes a while too. As a result, you might only be able to update it once in a while, which means that you’ll be working with outdated data.

Compared to financial documents that are hard to assemble, you can update a one-page financial plan on the fly. Changes happen all the time, and your clients’ financial plan is extremely sensitive to various factors, from client goals to world crises. A one-page financial plan makes it easy to modify the plan you’ve put together after every meeting with your clients.

Easy to understand

A one-page plan takes all the key points of your report and consolidates them into one document. This forces you to cut out anything unnecessary, like industry jargon and the nitty-gritty details, making it easier for clients to understand what you’re saying.

In addition, filtering which information is most important for them to know about also prevents you from overwhelming your clients into compliance.

Focus on next steps

Since the one-page financial plan also acts as a visual guide of their financial situation, you can also get over the “where you’re at” part of the conversation quicker.

Instead, focus the discussion on the next steps they need to take to achieve their financial goals.

Allowing clients to better understand their financial status means they’ll be more engaged in the discussion. Clients can actively participate in the conversation and decide on a path they’re comfortable with, not just nodding and quietly wondering if they can trust your advice.

How to Master the One-Page Financial Plan

While there are one-page financial plan templates, no plan is the same. Creating your own framework and arranging the information in a way that makes sense for your client is the key here. However, there are a couple of best practices that can help you create and improve your own one-page financial plan.

Focus on Client Needs

Before you set out to create a one-page financial plan, you need to analyze how your client thinks. Particularly what they need and what’s important for them, both in the short term and long term.

Knowing what values matter most for clients and the why’s behind their goals can help you tailor the one-page plan to only information relevant to their needs.

These are the foundation of your financial plan. A change in their core reason to care about their financial status means a change in their goals and, in turn, the plan itself.

For example, for a couple who prioritizes family time over a cushy lifestyle, it makes sense to pass a promotion that gets them a better salary but requires more hours. Someone who wants to be free from their student loan will need to know more about their cash flow, liabilities, and net worth in the first place before they can take your advice on budgeting decisions.

Those who value other aspects, such as stability, financial independence, or building wealth, will naturally have their own priorities as well. These clients may be more interested in learning about their retirement accounts.

Knowing these values can help you predict which information to put on your one-page plan and better anticipate what kind of action items would be best for your clients.

Eliminate Industry-Heavy Wording

Clients aren’t coming to you to geek out about the financial technicalities. They’re coming to hear that they’re on track to reach their goals and get financial advice on what they should do to accelerate their progress.

Eliminating industry wording ensures that all the key information is presented intuitively to clients — so you can refocus the conversation on things that matter. To achieve this, you’ll be cutting out anything you won’t need in the discussion.

Jargon just doesn't have a place in a one-page plan. Your clients don’t need to hear about the Sharpe ratio to reach an understanding of their personal finance.

Using unfamiliar language to discuss their financial situation will only make the conversation unnecessarily complicated. A confused customer might be more likely to say yes to what you’re saying. But you can only show your genius if customers know that you’re really helping them progress towards their financial goals.

Regularly Review Financial Plan

Editing traditional reports is resource-heavy, while you can make revisions to a one-page plan as soon as you detect a shift. 

While values are usually more stable than goals, this doesn’t mean they don’t change. Naturally, your clients’ values will change as they enter different life stages and encounter new challenges. This means that updating the financial plan once in a while is necessary to respond to these changes.

Various factors can impact a client’s financial plan, including external factors such as accidents, upcoming big purchases, or a worldwide crisis.

Reviewing your client’s financial plan regularly will ensure that your clients are meeting their goals — and that those goals are still aligned with their needs.

Create Your One-Page Financial Plan with Asset-Map

The one-page financial plan doesn’t mean that you’re skipping steps that you need to come to a sound strategy. After all, to be able to identify what matters and put them into the plan, you’d need to know your clients’ financial situation inside and out and put together your best guesses.

Your client can respond to a thick financial report with two possible reactions: get lost in the details or skim through it and miss all the important highlights. By replacing this report with a single page, you can inform them of what matters most and facilitate a more productive conversation.

Start creating your first one-page financial plan with Asset-Map, the most intuitive platform for creating visual maps for financial services. Practice financial planning, analysis, wealth management, and retirement planning using Asset-Map’s suite of tools and make running your financial service business so much easier.

Get your demo today and see how easy it is to create your first one-page financial plan with Asset-Map.