Financial Planning is the process of meeting your life goals through the proper management of your finances. Life goals may include buying a house, saving for your child's higher education or planning for retirement.
Six steps of Financial Plannning
1. Establish a relationship
Here, Financial Professional CFPCM explain about their financial planning services and define each of your responsibilities.
2. Data gathering and goal setting
You and your CFPCM will talk about your current financial situation and gather all necessary documents. CFPCM will help you define your personal and financial goals, within time frames considering your comfort level along with your financial risks appetite.
3. Analyzing and evaluating the client's financial status
Your Financial Planner will consider all aspects of your personal and financial situation to determine you needs to meet your goals. Your planner may analyse your assets, liabilities and cash flow, current insurance coverage, investments or tax strategies.
4. Developing and presenting the financial planning recommendations
Your financial planner offers financial planning recommendations that address your goals, based on the information you provided.Your planner will also listen to any concerns you may have and revise his/her recommendations if necessary.
5. Implementing the financial planning recommendations
In this step you and your Financial Planner agree on how recommendations will be carried out. The Planner may carry out the recommendations or serve as your 'coach', coordinating the whole process with you
6. Monitoring the financial planning recommendations
You and your Financial Planner will need to decide who will monitor your progress to make sure you're staying on track. If the planner is in charge, he or she will check in from time to time, reviewing your situation and making any necessary adjustments to his or her recommendations.