Financial planning is an ongoing process to help you identify and meet your life goals through proper management of your finances.
Financial planners follow the Six Step Financial Planning Process.
Six Step Financial Planning Process
1. Establishing and defining a professional relationship.
The initial contact will be dedicated to establishing a clear understanding of your immediate needs and/or concerns as well as getting a firm grasp of what services the financial planner provides.
We inform you about financial planning and the competencies we can offer.
Define the scope of engagement.
2. Gathering data, including goals.
Having clear goals and providing accurate financial information is key in ensuring a meaningful financial plan. You and your financial planner should mutually define your personal and financial goals, understand your timeframe for results and discuss how you feel about risk.
We will be identifying your personal and financial objectives, needs and priorities.
We will collect quantitative and qualitative information and documents.
3. Analysing and evaluating your financial status.
With clear goals set and your financial information at hand, your financial planner is able to “draw a line in the sand” and establish where you are in relation to your goals. Depending on what services you have asked for, this could include the following:
analysing your assets liabilities and cash flow
analysing current insurance coverage
analysing investments or tax strategies.
4. Developing and presenting financial planning recommendations and/or alternatives.
Once your financial information has been analysed, your financial planner will guide you through the various financial decisions available and make recommendations accordingly.
5. Implementing the financial planning recommendations.
Both you and your financial planner should agree on how the recommendations will be carried out. Your financial planner may carry out the recommendations co-ordinating the whole process with you and other professionals such as attorneys or stockbrokers.
6. Monitoring the financial planning recommendations.
Your financial planner will monitor your progress towards your goals. It is important that your plan and any financial solutions that were implemented be reviewed on at least an annual basis. This will be done to ensure that your plan remains relevant and meaningful in light of any changes in personal or financial circumstances.