What is Financial Planning?
This is the process of identifying, planning, and meeting the financial goals of individuals and their families. A written financial plan is the blueprint that is the guiding document for a client’s financial strategy. A financial planner is the professional that helps the client identify their future financial needs, and then creates a plan based on these individual factors. A comprehensive financial plan will include multiple components, including retirement, tax and estate planning.
Financial Planning Process: This process can be broken down into four steps:
1. Information gathering
2. Defining reasonable objectives
3. Designing the Financial Plan
4. Implementing and Maintaining the Financial Plan
Information Gathering: This is the process of gathering all the data that comprises a client’s financial life. Before we can give appropriate advice, it is essential that we have a complete and accurate picture of
a client’s current financial situation. Our objective is to help our client identify and locate all of their assets, liabilities, income, and legal documents. This can be summarized by the following: what is owned,
what is owed, and how it is held.
Defining Reasonable Objectives: In step two we help our clients define what they want to accomplish. We assist our clients in weighing their options and come to a firm grasp of what is most important to them and what can reasonably be achieved.
Designing the Financial Plan: To design this plan, we look at all of the client’s information through the filter of his or her objectives and pinpoint the areas in which the client is deficient. We then make recommendations to the client, listing the areas that we believe the client needs to address.
Our proposal is then discussed with the client and their other professional advisors. This financial team is a valuable resource and is essential to developing the final plan. By its nature, this process involves numerous other professionals, including a CPA and an attorney; the financial planner is the advisor that coordinates and manages this process.
Implementing and Maintaining the Financial Plan: It is not enough to have a written financial plan; many plans fail because the individual fails to implement their plan. Consequently, we work with our clients
to ensure their plan is correctly implemented. Client’s lives are always changing; businesses grow, children are born, clients retire, and loved ones pass away. By maintaining a long term relationship with our clients, we can maintain and adjust their financial plans to fit their changing lives.