Thursday, January 17, 2013
6 Step Financial Planning Process - FREE advice to the community
The Six-Step Financial Planning Process
By Elrod Outten
Step 1 is the initial discussion with your financial planner and helps establish the working relationship. At this stage your financial planner should ensure that you understand the six step process, identify your needs, agree on the level of advice you require, explain his or her role, discuss payment for services and obtain consent to proceed with advising you.
Step 2 is about gathering information on your current financial situation, commitments, short to long-term financial goals and your circumstances.
Step 3 is the financial assessment. It should involve a work-shop to assess your current financial situation. This may involve an analysis of your assets and liabilities, cash flow, current risk and, investments strategies. This allows you to investigate solutions to problems and identify strategies to capitalize on opportunities.
Step 4 requires that your financial planner offers strategic recommendations that address your goals based on your information. The recommendations should be explained to you in such a way that you understand them and should also be recorded in a written record of advice.
Step 5 is the implementation stage. Once you understand and are completely satisfied with the recommendations, you will need to authorize your financial planner to proceed with the implementation of the financial plan. After implementation, you and your financial planner will review final documentation for accuracy and to ensure that the plan has been implemented as agreed. Your financial planner should provide you with an updated summary of the consolidated financial plan. The first five steps of the six-step financial planning process are easy, since they are essentially a mathematical exercise. The final step requires the skill and experience to drive the performance of your resources.
Step 6 requires that your financial planner offers ongoing care. This is not an attempt to sell you a new product – it is a service that is separately coasted in a fee-based environment. The service must be customized to your requirements; regular review meetings will be scheduled over the ensuing years. At these meetings, you’re agreed strategies and investments are proactively reviewed to ensure that they
continue to meet your financial objectives. The review process will also provide you with an opportunity to ask your financial planner any questions you may have.
Mr. Elrod Outten is a veteran in the insurance industry and a financial consultant with Essential Consulting Services. Essential Consulting Services provide FREE advice to the community on financialmatters assisting from budgeting to retirement. Plan today for a secure tomorrow. For an appointment you can contact Essential Services at 477-8094
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