Financial Planning

Financial Planning

Why do I need financial planning?

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.

  1. 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.
  2. Collecting financial data
    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.
  3. Analysing your data
    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.
  4. Developing a 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.
  5. Implement 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.
  6. 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.

In a nutshell…

The financial planning process is designed to help you achieve and afford the things you most want from life, for yourself and your family. Whilst you may save money in the short term by avoiding financial planning, it could be very costly in the long term if you make the wrong decisions or buy unsuitable products. Financial planner’s knowledge, expertise and experience is something worth investing in – after all, it’s about investing in yourself at the end of the day.

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