Cynthia recognized that life events in recent years had distracted her from addressing financial planning of any sort. She is now receiving income from her teacher’s pension annuity. Fortunately, her retiree benefits include healthcare insurance, although co-pays and prescriptions still add up.

The inheritance from her mother arrived just before her cancer diagnosis; it’s currently parked in a money market fund, earning little interest. Cynthia hadn’t looked at her will and other estate planning documents since her divorce. Her financial situation is different now and she knew there were changes she would make should she become disabled and unable to make healthcare and financial decisions for herself.

Cynthia wondered how investing in a yoga business will affect her overall financial condition. She started asking herself questions: “Can I really afford to do this? What about my other goals? What if my cancer returns?” As her dream of being a business owner started to become more real, and as these types of questions remained unanswered, she found herself getting anxious. A yoga instructor colleague suggested Cynthia needed financial guidance services from an expert planner.

Cynthia scheduled a complimentary Introduction Call with Mandala Financial Advisors. Cynthia shared with us her immediate concerns and we described how we guide people in similar situations to hers using a comprehensive wealth planning process. We agreed that it felt like a good mutual fit and that we should advance to a deeper-dive Discovery Meeting.

In our Discovery Meeting we focused on gathering information and listening. We came to the meeting with questions for Cynthia across a wide range of topics. We explained there are no right or wrong answers. We wanted to understand her circumstances, dreams, and concerns.

After the conversation, we organized and documented what we heard and sent our notes to Cynthia for her review. We included descriptions of the goals she had described, and refined them over a few email exchanges.

We described in detail how we would work with Cynthia to guide her towards achieving her goals. She liked our holistic approach to financial planning and wellness, and was eager to engage in sustainable investing. Cynthia decided to engage us by subscribing to our ongoing Full Service Model which provides both comprehensive financial planning services and sustainable investment management services.

Cynthia provided financial statements for her bank accounts, credit card accounts, teachers’ pension annuity, investment/brokerage accounts, and auto lease. She also sent us copies of her most recent tax returns and a copy of her yoga studio business plan that included projected income and expenses.

We provided Cynthia access to our financial planning portal where she used a tool to help her organize and estimate her monthly living expenses. We had an independent research firm send Cynthia a risk tolerance questionnaire to complete. The results of this research helped us understand the appropriate level of investment risk to target when recommending an investment allocation across her investment accounts.

This information was essential to establishing an accurate financial plan at our next meeting, Explore the Possibilities.

Explore the Possibilities Meeting

We opened this meeting with a list of initial recommendations based on the information we had already collected. It centered on:

• Cynthia to fund a separate healthcare account for any unexpected treatment costs not covered by health insurance, giving her peace of mind are covered.
• Cynthia to select an estate planning attorney who could review and update her existing estate documents (will, trust, powers of attorney); we provided a short list of qualified estate planning attorneys at her request.
• Cynthia to begin making contributions to a 529 college savings plan to help fund her granddaughter’s eduction.

Working together on the financial planning portal, we started by sharing a balance sheet consolidating Cynthia’s assets and liabilities. Her net worth was more than she had anticipated, which is often the case with our clients. We explored the likelihood of her achieving her goals under assumptions for future income, expenses (lifestyle expenses and the cash outlay to fund the business), and investment returns.

Cynthia’s business income presented the biggest wildcard; we reviewed multiple scenarios using different income forecasts so we could see how the likelihood of achieving her goals would be affected.

The information we gathered during these exercises was important to developing the initial financial plan we would present to Cynthia at the Plan Delivery Meeting.

We presented the initial plan to Cynthia. Together, we settled upon the the following actions:

• Since we found her pension was enough to cover her monthly lifestyle expenses, Cynthia would use part of her inheritance to fund her business start-up.
• We would open a taxable investment account and Cynthia to transfer her remaining inheritance to the account for ongoing investment management
• We would apply an investment asset allocation that would provide the best likelihood of achieving Cynthia’s other financial goals (charitable giving, a legacy for her family, and travel) at risk level in her comfort zone.
• We would chose ESG funds that had histories of delivering top ranking financial returns, and which are aligned with Cynthia’s values of a more socially just world.

In addition to these immediate actions, we also advised Cynthia to set up a Donor Advised Fund that would serve as a repository for funds set aside to support non-profit theaters; it would offer tax advantages, anonymity (when desired), and could be a means of engagement for her children and granddaughter.

 We agreed to meet quarterly and reassess meeting frequency at the end of the first year. We would continue refining the financial plan for other topic areas identified on our service calendar, such as wealth transfer tax strategies, insurance, and business planning. We would update Cynthia’s financial plan as her circumstances and goals evolve over time.

Along the journey we would provide Cynthia coaching on developing financial habits that would continue to improve her financial wellness and likelihood of achieving her goals. We would continue to educate her in sustainable investing and ways for her to align her investments with her values.