Masters of Science in Financial Services | The Financial Plan

A requirement for the MSFS 700 cap stone course, The Financial Plan, is the completion of a financial plan. The MSFS student is given a one-page fact pattern about a hypothetical client. The student should then draft a 10-20 page financial plan based on this fact pattern.

The financial plan should include typical headings such as: background, goals, objectives, strategy, implementation and review—with the following guidelines:

Background
Restate financial and other important information found in the fact pattern (i.e., “age 55, married, two children, no life insurance, $80,000 gross income, etc.).

Goals
List, in order of priority, what the client is trying to accomplish (i.e., comfortable retirement, send two children through college and graduate school, take a cruise once a year, etc.).

Objectives
Translate goals into dollar figures (i.e., client feels a “comfortable retirement” translates into having a $900,000 lump sum or enough principal to generate $5,000 of pre-tax monthly income, including social security).

Strategy
Advisor describes historical returns, risk and asset class correlations so the client has a better understanding of what to expect from investment categories being considered by the advisor. A brief description of each asset may also be included (i.e., a money market fund is comprised of extremely high-quality debt instruments that have an average maturity of….).

Implementation
Advisory points out pros of cons of individual securities and packaged products such as ETFs, mutual funds, annuities, REITs, etc. Advisory should also comment on how quickly investments are to be made and over what period of time as well as dollar amounts.

Review
Advisor describes frequency and type of review that will occur and its (e.g., an investment policy statement). Frequency of progress reviews should be justified as well as what steps are to be taken if annual/quqrterly portfolio growth is better or worse than expected.