Personalizing a
financial plan for you

Think of a financial plan as the blueprint for identifying, pursuing and achieving your goals.

The blueprint may be a written, broad-based document plan that encompasses your personal list of goals and objectives .It may be more specific and focused on a particular objective such as retirement. It may encompass all of your assets or may highlight a specific portfolio. Whatever its focus, the plan is unique to you.

In its Standards of Professional Conduct, the CFP Board defines financial planning as “the process of determining whether and how an individual can meet life goals through the proper management of financial resources.” There are six steps in financial planning process.

  • 1
    Establishing & defining the
    client-planner relationship

    The financial planner explains or documents the services to be provided and defines his or her responsibilities along with the responsibilities of the client. The planner explains how he or she will be paid and by whom. The planner and client should agree on how long the relationship will last and on how decisions will be made.

  • 2
    Gathering client data &
    determining goals & expectations

    The financial planner asks about the client’s financial situation, personal and financial goals and attitude about risk. The planner gathers all necessary documents at this stage before giving advice.

  • 3
    Analyzing & evaluating the
    client’s financial status

    The financial planner analyzes client information to assess his or her current situation and determine what must be done to achieve the client's goals. Depending on the services requested, this assessment could include analyzing the client's assets, liabilities and cash flow, current insurance coverage, investments or tax strategies.

  • 4
    Developing & presenting the
    financial planning recommendations
    and/or alternatives

    The financial planner offers financial planning recommendations that address the client's goals, based on the information the client provided. The planner reviews the recommendations with the client to allow the client to make informed decisions. The planner listens to client concerns and revises recommendations as appropriate.

  • 5
    Implementing the financial
    planning recommendations

    The financial planner and client agree on how recommendations will be carried out. The planner may carry out the recommendations for the client or serve as a coach, coordinating the process with the client and other professionals such as attorneys or stockbrokers.

  • 6
    Monitoring the financial
    planning recommendations

    The client and financial planner agree upon who will monitor the client’s progress toward goals. If the planner is involved, he or she should report to the client periodically to review the situation and adjust recommendations as needed.