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THE COMPREHENSIVE FINANCIAL PLANNING PROCESS

Financial planning is individual and personal.  It should focus on all psychological and financial factors that may have an impact on your financial goals and objectives.  In short, comprehensive financial planning provides you with a long-term strategy for your financial future, taking into consideration every aspect of your financial situation and how each affects your ability to achieve your goals and objectives. 

A financial plan can help you construct the foundation on which to build a secure financial future.  Through six distinct steps in the comprehensive financial planning process, a financial advisor helps you:

• Clarify your present situation by collecting the facts

You will want to assess all relevant personal and financial data such as lists of assets and liabilities, tax returns, records of securities transactions, insurance policies, wills, trusts, pension plans, etc.

• Decide where you want to be - financially

This step will require you to identify both financial and personal goals and objectives.  The financial planning practitioner helps you clarify financial and personal values and attitudes.  These may include providing for the college education of your children or grandchildren, supporting aging parents, or relieving immediate financial pressures that would help maintain your current lifestyle and provide for retirement.  These considerations are as important as what is in your bank account in determining your best strategy.

• Identify financial problems that create barriers to you

Problem areas can include: too little or too much insurance, a big tax burden, inadequate cash flow, or current investments that are losing the battle with inflation.  These possible problem areas must be identified before solutions can be found.

• Provide a written financial plan

The length of the plan document will vary with the complexity of your individual situation.  It should always be structured to meet your needs and objectives.

• Implement agreed-upon recommendations from your plan

A financial plan is only helpful if the recommendations presented are put into action.  However, the decision to implement, modify or reject the recommendations remains your sole responsibility.  You may request that the advisor assist in the implementation of the agreed upon recommendations, including coordination with other knowledgeable professionals as required.  You may implement the plan yourself or with another advisor.

• Periodically review and revise your plan

A financial plan is no better than the data upon which it is based.  Therefore, periodic reviews and revisions of the plan are essential to account for changes in personal and economic conditions.  While this task may be accomplished without assistance, it is usually advantageous to have your advisor provide these services for you.

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