The Financial Planning Process

What is financial planning?

Financial planning is a collaborative process that helps maximize a client’s potential for meeting life goals through financial advice that integrates relevant elements of the client’s personal and financial circumstance.

Financial planning is the process of meeting your life goals through the proper management of your financial resources. These may include purchasing a home, saving for college, or planning for retirement. It’s important to know that financial planning is a process, not a transaction. The goal is to adopt a big-picture, integrative approach to your personal finances.

Financial planning is about controlling spending, managing credit, reducing taxes, increasing savings, protecting family and assets, and building wealth for the future. This process entails gathering financial information, establishing life goals, evaluating your current financial status, and developing a strategy to help you achieve your life goals.

What is the financial planning process?
To develop a solid financial plan, it's important to cover all your bases, including examining your current situation, setting financial goals, and measuring your progress. From start to finish, a Certified Financial Planner™ professional can take you through the financial planning process steps to help you achieve your financial goals.

Here are six financial planning steps:

Step 1: Understanding the Client’s Personal and Financial Circumstances. 

Step 2: Identifying and Selecting Goals

Step 3: Analyzing the Client’s Current Course of Action and Potential Alternative Courses of Action

Step 4: Developing the Financial Planning Recommendation(s)

Step 5: Presenting the Financial Planning Recommendation(s)

Step 6: Implementing the Financial Planning Recommendation(s)

Step 7: Monitoring Progress and Updating

Why Planning

Creating a financial plan helps you see the big picture and set long and short-term life goals, a crucial step in mapping out your financial future. When you have a strategy and a financial plan, it's easier to make financial decisions and stay on track to meet your goals. Working with a CFP® professional can secure your financial well-being and give you financial confidence.

Financial planning helps you understand the impact that each financial decision has on other areas of your financial life. For example, increasing contributions to your employer-sponsored retirement plan affects your cash flow, taxes, investment portfolio, and retirement plan. This integrated approach to managing your wealth provides clarity and confidence to your financial decisions. You can also adapt readily to life transitions and gain a sense of empowerment knowing that you are progressing towards your financial goals.

Wealth management is a comprehensive investment practice that encompasses financial planning, investment portfolio management, risk management, tax planning strategies, and estate-planning services to high-net worth individuals. Wealth management is a holistic approach to understanding and providing solutions to the many financial concerns of a client’s financial life. Just as a primary care physician serves as a gatekeeper to coordinate the care given by varied organizations and collaborates with referral specialists, a wealth manager acts a relationship manager to better serve the client.

As the financial lives of wealthy clients have become more complex, many of our clients value a streamlined integrative approach to managing their financial affairs.