Financial planning help can help you achieve your financial goals and there’s one thing for sure – if you don’t plan it’s the same as planning to fail.
What are the steps in the financial planning process?
These 6 steps are used by all Certified Financial Planners as an effective method of reaching client goals.
Establishing a relationship and determining your goals
This is your chance to get to know your financial planner, and their chance to understand you. This stage is important in building trust because achieving a good relationship is key to the process being successful.
Gathering your financial details
The next stage is to start to understand your specific financial circumstances, needs and objectives. Your financial planner will also try to gauge your risk tolerance, capacity for loss and your knowledge and experience of investing. This is important in determining which financial products or services are suitable for you.
Analysing the information gathered
Your planner will then analyse the information collected about you, weigh up the options available to help you achieve your objectives and identify suitable products and services. You also will gain a better understanding of what it will cost to achieve your goals and over what timeframe you might be able to do so.
Designing your financial plan
This is where the planning really begins. Taking into account the information collected and the analysis that will have been carried out, your planner will discuss your options, your investment strategy, the costs and any others things which might be important to you.
Implementing the plan
Once you have discussed the options and solutions proposed in your plan, including understanding the risks, costs and timeframe involved, you can then instruct your financial planner to implement those plans which may involve setting up certain products and or applying for specific services.
Monitoring the plan and reviewing your situation
Life and your plans change. Therefore, it is important to regularly review your plans and your arrangements to monitor things like investment performance and continued suitability. Financial planning advice is most effective when you regularly review. It is important to continue to understand whether the initial advice is still working for you and keep your financial planner updated on your financial circumstances. Equally, regulations, taxes and legislation changes just as your circumstances do. If new laws come in to force that may affect your financial plan, these need to be taken into account and your arrangements may need to be tweaked to accommodate these and keep you on track.