Why Healthcare Is a Critical Component of Comprehensive Financial Planning

Christine Simone
February 7, 2024

Consumers are spoiled for choice when it comes to hiring a financial services professional for advice and guidance. Some professionals specialize in insurance, some specialize in investment management, and others run the gamut, providing a little something we like to call comprehensive financial planning.

But here's the thing:

Lots of finance professionals today use the term comprehensive financial planning to describe what they do a little too loosely. There’s not a lot of standardized guidance on what comprehensive financial planning really is, and there are certainly no regulatory requirements stating who can use the term and in what way..

Today we’re going to break down what comprehensive financial planning really is, while also discussing one oft-overlooked but ever-so-important component of your clients’ comprehensive financial lives: health insurance and healthcare planning. 

What Comprehensive Financial Planning Is Not

With a topic like this, it can sometimes be easier to start by defining what it’s not. Simply put, comprehensive financial planning is not advice that is focused (or even mostly focused) on one single area of clients’ financial lives. 

For example, broker-dealers who only design, manage, and rebalance their clients’ portfolios are not comprehensive financial planners. 

Life insurance agents who only sell life insurance – even as retirement planning products – are not comprehensive financial planners. 

CPAs who offer peripheral financial advice while engaging in tax planning sessions are usually not comprehensive financial planners.

And even a financial advisor who specializes in retirement planning may not automatically be a comprehensive financial planner unless they specifically provide advice on matters outside retirement plans, such as education and tax planning. Even then, they would need to take into account someone’s entire financial picture to be considered a comprehensive financial planner.

So What Is Comprehensive Financial Planning?

Comprehensive financial planning, also known as holistic financial planning or life planning, is the process of creating a financial plan for all of life’s events to ensure financial and lifestyle wellbeing. Most comprehensive financial planners help clients plan for the following components of their life:

  • Cash flow analysis and planning
  • Debt repayment strategies
  • Investment strategies
  • Investment management and portfolio rebalancing
  • Risk management and mitigation
  • Tax planning
  • Insurance analysis
  • Education planning
  • Retirement planning
  • Long-term care planning
  • Estate planning
  • Business planning, if applicable

To engage in comprehensive financial planning, financial advisors must get to know their clients on an intimate level to understand their values, needs, and goals for the future. Comprehensive financial planning goes well beyond numerical goals. 

Instead, comprehensive financial planners propose strategies and develop plans based on what is most important to the client in terms of values and lifestyle visions.

So Why Is Healthcare Left Out of Comprehensive Financial Planning?

As you can see from the diagram above, any mention of one’s healthcare is not included in this advisor’s holistic process. But healthcare and medical costs are among people’s top financial concerns and have been for years. Furthermore, retirees report that good health is their number one factor for a happy and fulfilling retirement. 

At face value, it doesn’t make sense why financial planners don’t focus on medical costs and health insurance planning as a major component of their clients’ comprehensive financial plan.

But the truth is, health insurance and healthcare planning are incredibly complex. Insurance agents and financial advisors alike are hesitant to give advice on such complex policies, especially because health insurance is such a deeply important component of one’s wellbeing and ability to weather emergencies.

Because of the rising complexity of health insurance policies and options, even some insurance agents have stopped selling health insurance and instead focused on other types of insurance, such as life insurance or property and casualty insurance. These insurance policies are far less complex to understand and provide advice on.

Sadly, this means that the average American doesn’t have many places to turn for healthcare advice.

Why You Should Include Healthcare in Your Client’s Financial Plans

The gap in the availability of healthcare advice is an incredible opportunity for comprehensive financial advisors to provide better service to their clients and increase their value. As fiduciaries, financial advisors are committed to always working in their clients’ best interests. 

Helping clients build medical costs into their financial plan, analyzing their health insurance options, and providing guidance on the options that are right for them is absolutely in their best interest. 

Even clients who have health insurance through an employer don’t have many places to turn to with questions. Although HR departments have traditionally been able to answer questions about the benefits offered through the company, the rising complexity of health insurance plans and the fact that multiple options are often offered prevents even HR reps from being able to give clear answers.

When you offer healthcare planning, including an in-depth health insurance analysis, into your suite of services, you:

  • Increase your value to existing and prospective clients.
  • Add value and clarity to your clients’ lives.
  • Create opportunities to save your clients tens of thousands of dollars.
  • Provide truly comprehensive financial advice.

How to Include Healthcare and Insurance Planning In Your Comprehensive Financial Plans

Here’s the thing: You do not have to become a health insurance expert to start providing health insurance advice to your clients. And you don’t have to hire a health insurance expert, either. 

Instead, you can partner with a resource like Caribou.

At Caribou, we partner with financial advisors all over the country so they can help their clients build health insurance and medical costs into their comprehensive financial plan. We provide our partners with access to our integrated suite of tools that provide insights and planning opportunities based on their clients’ unique circumstances. 

We also provide exclusive access to our network of expert Healthcare Advisors so you can refer your clients to a trustworthy, knowledgeable, carefully vetted expert. To see if we can help you increase your value to your clients, click here to get in touch with us today.

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