The financial planning process consists of the following six steps:
1) Establishing and Defining a Professional Relationship
In this step, my services will be explained to you and documented. My role and responsibilities will also be defined.
2) Gathering Data, Including Goals
In order to create your individual holistic financial plan, critical information about your financial situation will need to be discussed and documented. Your personal & financial goals will be mutually defined, your time frame for results needs to be understood and, if relevant, how you feel about investment risk needs to be established. All necessary documentation will also be gathered at this time.
3) Analyzing and Evaluating Your Financial Status
The information discussed and documented will be analysed to assess your current situation and determine what you must do to meet your goals. Depending on what services you have asked for, this could include analyzing your assets, liabilities and cash flow, current insurance coverage, investments or tax strategies.
4) Developing and Presenting Financial Planning Recommendations and/or Alternatives
Financial planning recommendations will be offered, that address your goals, based on the information you provided. The recommendations will be discussed with you to help you understand them so that you can make informed decisions. In this step, you should raise any concerns you have, and the recommendations will be revised as appropriate.
5) Implementing the Financial Planning Recommendations
An agreement will be reached as to how the recommendations will be carried out. The effect of this will be analysed. The risks of not following the proposal or recommendation will be pointed out and discussed with you.
6) Monitoring the Financial Planning Recommendations
Your progress towards your goals is to be monitored. An annual review will take place to document any life changes that may have affected your financial situation. Your financial plan will be updated and the appropriate recommendations will be presented to be implemented.