Our Process

The 6 Steps of Financial Planning

We follow the 6 steps of financial planning to create recommendations and financial plans for our clients. We follow the 6 steps of financial planning to create recommendations and financial plans for our clients. What Are the 6 Steps of Financial Planning?

⦁ Establish the goal/relationship
⦁ Gather data
⦁ Analyze data
⦁ Develop a plan
⦁ Implement the plan
⦁ Monitor the plan

Financial Planning Process Step 1: Establish the Goal / Relationship

Establishing the goal, or relationship, is where we introduce ourselves to a client or prospective client and explains the financial planning process. We may ask open-ended questions to uncover necessary information to start the plan. This information may include a range of topics, from financial goals, to feelings about market risk, to personal interests.

The step of establishing the goal forms a guiding philosophy to direct investment objectives, cash management, insurance needs, and other financial instruments to help achieve your specific financial goals.

Financial Planning Process Step 2: Gather the Relevant Data

The relevant data gathered is required to make recommendations for the appropriate strategies and financial products to reach your goals. For example, what is your time horizon? Do you want to accomplish this goal in five years, 10 years, 20 years, or 30 years? What is your risk tolerance? Are you willing to accept a high relative market risk to achieve your investment goals, or will a conservative portfolio be a better option for you?

Also, how far along are you in your goals? Do you have any money saved yet? Do you have life insurance Do you have a will? Do you have children? If so, what are their ages?

Financial Planning Process Step 3: Analyze the Data

The third step in the financial planning process entails gathering client data, analyzing and evaluating the client’s financial status, and defining client goals. Financial goals are the heart of the financial planning process. We assist clients in establishing, quantifying and prioritizing realistic goals while quantifying them in terms of measurable objectives (specific time frames and investment amounts). This is accomplished by the following action items:

⦁ Gather quantitative and qualitative information by completing a comprehensive client data fact finder questionnaire.
⦁ Construct client budgets, cash flow statements, and financial statements.
⦁ Review all data and relevant documents. Obtain from client any missing information or documents needed to develop the financial plan.
⦁ Analyze all information and identify strengths and weaknesses with respect to the clients stated goals and objectives.
⦁ Discuss various options available (i.e. products and strategies) consistent with client goals and evaluate them in terms of the clients current and future situation

Financial Planning Process Step 4: Develop the Plan

In this stage, first we will identify appropriate techniques that are consistent with client objectives in light of the economic environment. In investment portfolio construction, for example, asset categories consistent with the client’s objectives and constraints are identified. Second, we will select alternative investments within those categories, and/or appropriate insurance products, forms of business operation, intrafamily transfers, tax strategies, retirement plans, and estate planning techniques.

After further evaluation of alternative solutions, an integrated set of recommendations is developed to meet client requirements. Frequently, a schedule for implementing recommendations is developed and incorporated into the financial planning recommendations. These recommendations then are presented to the client, usually in writing. It is possible that even at this stage of the process, client objectives may be subject to reorder or change, in which case step 4 and 5 will be repeated.

Financial Planning Process Step 5: Implement the Plan

Implementing the plan means you are putting your plan to work! But as simple as this sounds, many people find that implementation is the most difficult step in financial planning. Although you have the plan developed, it takes discipline and desire to put it into action. You may begin to wonder what may happen if you fail. This is where inaction can grow into procrastination.

Financial Planning Process Step 6: Monitor the Plan

It's called "financial planning" for a reason: Plans evolve and change just like life. Once the plan is created, it's essentially a piece of history. This is why the plan needs to be monitored and tweaked from time to time. Think of what can change in your life, such as marriage, the birth of children, career changes and more
These life events may require new perspectives or changes to your financial plans. Now think events or changes beyond your control, such as tax laws, interest rates, inflation, stock market fluctuations, and economic recessions.