Financial Planning Process
Step 1: Collecting the Data
We collect the essential information from our clients by administering a questionnaire. The questions detail our client’s financial situation and lifestyle. This process is supported by the following:
Step 2: Identifying Goals and Objectives
At this point, we determine in as much detail as possible, actual goals and objectives the client wishes to achieve. Both spouses are encouraged to be actively involved in this process. Goals may be to retire early, maximize retirement income, minimize taxes, reduce portfolio risk, provide for the education of a child, travel, or simply to learn to manage their money.
Step 3: Identify Financial Needs
Here we translate our client’s goals, ambitions and dreams into realistic financial terms. For example, how early is ‘early’ retirement. And how do our clients define ‘retirement’ – playing golf six days a week? travelling? pursuing hobbies? Obviously some retirements will cost a lot more than others and we help determine those income levels that will be required. That income level, in turn, determines the extent to which our client will need to accumulate savings and investments between now and the projected date of retirement.
Unbiased recommendations will then be made, acknowledging different schools of thought so clients understand all sides of the story. A particular course of action is proposed based on sound financial planning principles and professional judgements that apply to the particular client’s needs and desires.
Step 4: Developing a Comprehensive Written Plan
The plan has a two-fold purpose: First, it serves as a blueprint for financial security and secondly, it becomes the benchmark against which the results of the plan will be measured.
The length of any plan depends on the complexity of the client’s situation and their needs. We carefully review the plan with our clients so it is fully understood.
Step 5: Implementing the Plan
Once our client confirms the plan, the next step is to implement the plan on the schedule laid out in the recommendations. We share the obligation with our clients to make sure the proper professionals are contacted and the strategies take form. There is no plan in the world worth anything unless it’s followed by appropriate action.
Step 6: Review the Plan Periodically
A financial plan is never carved in stone. In fact, as circumstances or situations change, there will be a need to reevaluate the plan. Changing variables might include a new baby, an inheritance, death of a spouse or an external condition like a change in the tax law. In any case, monitoring of the plan is vital to the survival of one’s financial future.