Financial Planning Process
We believe our clients benefit the most by engaging in a financial planning relationship. This allows us to better understand their needs and goals and give tailored advice. We follow the financial planning process as prescribed by the Certified Financial Planner Board of Standards.
The Standards of Professional Conduct define financial planning as “the process of determining whether and how an individual can meet life goals through the proper management of financial resources. Financial planning integrates the financial planning process with the financial planning subject areas.”
“Financial planning subject areas” denotes the basic subject fields covered in the financial planning process which typically include, but are not limited to:
- Financial statement preparation and analysis (including cash flow analysis/planning and budgeting)
- Insurance planning and risk management
- Employee benefits planning
- Investment planning
- Income tax planning
- Retirement planning
- Estate planning
- Establishing and defining the client-planner relationship
Your financial planning professional will explain his financial planning services and define each of your responsibilities. Along with compensation, you'll discuss how long the professional relationship will last and how to make decisions.
- Gathering client data including goals
You and your financial planning professional will talk about your current financial situation and gather any necessary documents. Together, you'll define your personal and financial goals, including timeframes. You may also want to discuss your comfort level when it comes to taking financial risks.
- Analyzing and evaluating the client’s current financial status
Your financial planning professional will then consider all aspects of your situation to determine what you need to do to meet your goals. Depending on what services you've asked for, your planner may analyze your assets, liabilities and cash flow, current insurance coverage, investments or tax strategies.
- Developing and presenting recommendations and/or alternatives
Your financial planning professional will go over his financial recommendations, explaining the rationale so you can make informed decisions. At this stage, your planner will also listen to any concerns you may have and revise his recommendations if necessary.
- Implementing the recommendations
You and the financial planning professional will need to agree on how the recommendations will be carried out. Your financial planning professional may carry out the recommendations himself or serve as your coach, coordinating the process with you and other professionals, like attorneys or accountants.
- Monitoring the recommendations
As you work towards your goals, you and your financial planning professional will need to decide who will monitor your progress to make sure you're staying on track. If the planner is in charge, he'll check in from time to time, reviewing your situation and making any necessary adjustments to his recommendations.
*This description was taken from the CFP® Board of Standards website. Click here to learn more.