Financial Planning - Your Road Map and GPS
Where are you? Where do you want to go? How do we get there together
Financial planning consists of the following six distinct steps. Be familiar with them. They'll help you get the most out of the process. This big-picture approach sets financial planners apart from all other financial advisors who may have been trained to focus only on one aspect of your finances.
1. Establish the client-planner engagement | I will: - Explain issues and concepts related to the overall financial planning process that are appropriate to you.
- Explain the services I will provide and the process of planning and documentation.
- Clarify your responsibilities as a client.
- Clarify my responsibilities as your planner. This will include a discussion about how and by whom I will be compensated for managing your finances.
| | You and I will: - Discuss the scope of the client-planner engagement.
- Agree on how decisions will be made.
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2. Gather your financial data and determine your goals and expectations | I will: - Obtain information about your financial resources and obligations through interviews or questionnaires.
- Gather all the necessary documents before giving you the advice you need.
| | You and I will:
- Define your personal and financial goals, needs and priorities.
- Investigate your values, preferences, financial outlook and desired results as they relate to your financial goals, needs and priorities.
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3. Clarify your present financial status and identify any problem areas and opportunities | I will: - Analyze your information to assess your current situation (cash flow, net worth, tax projections, etc.).
- Identify any problem areas or opportunities with respect to your:
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o Capital needs
o Risk management needs and coverage
o Investments
o Taxation
o Retirement planning
o Employee benefits
o Estate planning
o Special needs (i.e., adult dependant needs, education needs, etc.)
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4. Develop and present the financial plan | I will: - Develop and prepare a financial plan tailored to meet your goals and objectives, values, temperament and risk tolerance, while providing projections and recommendations.
- Present the plan to you and establish an appropriate review cycle.
| | You and I will: - Work together to ensure that the plan meets your goals and objectives.
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5. Implement your financial plan
| I will: - Assist you in implementing the recommendations discussed. This may involve coordinating contacts with other professionals, such as investment funds sales representatives, accountants, insurance agents and lawyers.
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6. Monitor the financial plan | You and I will: - Monitor and evaluate whether your plan is helping you progess toward your goals.
- Review the progress of the plan periodically and make adjustments to the recommendations required to help you achieve your goals.
| | This review will include: - A discussion about changes in your personal circumstances and how they might affect your goals.
- A review and evaluation of the impact of changing tax laws and economic circumstances.
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