What is cash flow planning?
Defining a plan of action around your personal cash flow allows you to be more intentional and effective with your wealth.
The primary objective of cash flow planning is to understand inflows and outflows and develop a plan of action to allow you to be more effective with your wealth. There can be numerous benefits to cash flow planning for high-net worth individuals and families.
Getting started with cash flow planning
Cash flow planning is typically conducted in concert with your wealth advisor, who’ll gain an understanding of your assets, various sources of income, and how you spend that income. But they’ll also dig deeper by exploring your lifestyle expenses, debt repayment, aspirational goals, as well as your charitable giving that will define your legacy. The result could be a multi-year cash flow analysis to help you visualize how different assumptions, such as significant purchases, family, or philanthropic gifts will affect your long-range cash flow and assets. Cash flow modeling can also help you determine the appropriate investment strategy to meet your stated intentions.
Why is cash flow planning important?
Obtaining an understanding of your cash flow can result in benefits such as the reduction of income and wealth transfer taxes, more effective family and philanthropic giving, strategic investment account drawdowns, and enhanced portfolio and risk management. Two areas that can benefit are legacy and investment planning.
"Cash flow planning empowers you to make strategic decisions regarding the role and purpose of your wealth during your lifetime and after your passing. An additional benefit is solidifying an investment objective to achieve your ambitions."
Jill Garvey
Wealth Strategist, Huntington Private Bank®
Considerations for estate and legacy planning
Successful estate planning is an on-going exercise. Many wealthy individuals and families want to retain a healthy income stream and control over their assets. They may forego estate planning opportunities and overpay from a tax standpoint.
Creating a cash flow analysis and wealth plan, in concert with your financial, tax and other advisors, allows you to visualize what your estate and tax situation could look like if you don’t act and what it would be like if you give away a portion of your assets to family or charity. A comprehensive analysis will empower you to move forward.
Cash flow modeling enhances portfolio outcomes
Determining a strategic asset allocation is the most important aspect of the investment process. Financial advisors worth their salt understand your financial circumstances, goals and tolerance for risk and will help recommend an appropriate mix of assets to achieve your objectives.
Multi-year cash flow modeling gives a long-term view of your probability of achieving your goals given various assumptions and rates of return. Most wealthy individuals will not be able to meet their ongoing lifestyle objectives by investing in cash. Instead, there needs to be a component of growth in the portfolio to outpace inflation, which is usually attained by investing in stocks. Therefore, long-range cash flow planning can help solidify asset allocation recommendations needed to maximize returns to support goals.
We can help
Cash flow planning can make it easier for high-net-worth families and individuals to prioritize their goals and objectives and for their advisory team to provide customized tax and estate planning recommendations. To learn more, please contact your Huntington Private Bank team to see how we can help or find a Huntington Private Bank office near you.
The information provided is intended solely for general informational purposes and is provided with the understanding that neither Huntington, its affiliates nor any other party is engaging in rendering tax, financial, legal, technical or other professional advice or services, or endorsing any third-party product or service. Any use of this information should be done only in consultation with a qualified and licensed professional who can take into account all relevant factors and desired outcomes in the context of the facts surrounding your particular circumstances. The information in this document was developed with reasonable care and attention. However, it is possible that some of the information is incomplete, incorrect, or inapplicable to particular circumstances or conditions. NEITHER HUNTINGTON NOR ITS AFFILIATES SHALL HAVE LIABILITY FOR ANY DAMAGES, LOSSES, COSTS OR EXPENSES (DIRECT, CONSEQUENTIAL, SPECIAL, INDIRECT OR OTHERWISE) RESULTING FROM USING, RELYING ON OR ACTING UPON INFORMATION IN THIS DOCUMENT EVEN IF HUNTINGTON AND/OR ITS AFFILIATES HAVE BEEN ADVISED OF OR FORESEEN THE POSSIBILITY OF SUCH DAMAGES, LOSSES, COSTS OR EXPENSES.
Investment, Insurance and Non-deposit Trust products are: NOT A DEPOSIT • NOT FDIC INSURED • NOT GUARANTEED BY THE BANK • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • MAY LOSE VALUE
The Huntington National Bank (“Huntington Bank”) offers a full range of wealth management and financial services through dedicated teams of professionals within the Huntington Private Bank® and Huntington Financial Advisors® as follows:
- Banking solutions, including loans and deposit accounts, are provided by Huntington Bank, Equal Housing Lender and Member FDIC.
- Trust and investment management services are provided by Huntington Bank, a national bank with fiduciary powers.
- Certain insurance products are offered by Huntington Insurance, Inc. and underwritten by third-party insurance carriers not affiliated with Huntington Insurance, Inc.
- Certain investment advisory solutions, securities, and insurance products are provided by Huntington Financial Advisors®, a financial advisory practice of Ameriprise Financial Services, LLC (“Ameriprise”). Huntington Financial Advisors® is the trade name of the investment program offered through Huntington Bank. Certain employees of Huntington Bank provide investment advisory, brokerage, and insurance services, offered by and through Ameriprise in their capacity as registered representatives of Ameriprise. Ameriprise is a registered investment adviser and broker-dealer member of FINRA and SIPC. Ameriprise is not affiliated with Huntington Bank, Huntington Insurance, Inc., or Huntington Bancshares Incorporated. Ameriprise and Huntington Bank partner to provide financial planning services and solutions to clients. Huntington Bank is not an investment client of Ameriprise; however, it receives revenue sharing payments from Ameriprise, which creates a conflict of interest. Details on how we work together can be found on ameriprise.com/sec-disclosure.
Huntington Private Bank® is a federally registered service mark of Huntington Bancshares Incorporated.
Huntington Financial Advisors® is a federally registered service mark of Huntington Bancshares Incorporated and is used under license.
Huntington Bank and Huntington Insurance, Inc. are wholly-owned subsidiaries of Huntington Bancshares Incorporated.
Minimum investment or deposit balance criteria apply with respect to the Huntington Private Bank. Please contact a Huntington Private Bank colleague for more information on eligibility requirements.
Third-party product, service and business names are trademarks/service marks of their respective owners.
