Lesson 6 | When Collaboration Makes Sense (2:12 minutes)

When Collaboration Makes Sense

Collaboration becomes more important and impactful when the process would be enhanced by the input of other advisors from other disciplines, or when planning will result in the need for services from advisors with another discipline. The importance of collaboration increases in proportion to the scope and complexity of the planning that we're talking about.

Let's talk about these areas a little bit. Transactional planning, much of the planning could be characterized as tactical, and oftentimes we use these words interchangeably. Transactional planning generally focuses on one primary transaction, such as investment planning or a qualified personal residence trust or a charitable remainder trust or a life insurance trust or a 529 plan. Clearly these concepts require planning, but they're generally narrower in scope and far more common than comprehensive integrated planning. Nonetheless, many such transactions have gone wrong because advisors have failed to involve other advisors appropriately. The larger and more complex the transactions deserve the attention of a collaborative team.

Let's talk about comprehensive integrated planning. This is also often communicated as strategic or holistic planning. Comprehensive integrated planning looks at most or all of the aspects of a clients financial situation. This would include income tax or cash flow, asset management, business succession maybe, wealth transfer, maybe charitable planning issues. It would be virtually impossible to do a competent job of comprehensive integrated planning without a collaborative team.So, whether your work happens to fall into transactional or comprehensive by definition, it's critical to understand that communication, coordination, and cooperation are a must for consistent success. Lastly, because as we've pointed out there are a number of different terms being used across various advisor disciplines, it's critical to create a common language in all of your collaborations. The bottom line, words matter.