The Financial Planning Process

Many new clients have never been through the steps of financial planning before and I find it helps if they know what to expect. A Certified Financial Planner ^TM professional should follow the practice standards as defined by the Certified Financial Planner Board of Standards, Inc. For every step in the process, there are corresponding standard(s).

• Establish the relationship
  • Define the scope of engagement
• Gather data
  • Identify the clients personal and financial goals, needs, and priorities
  • Obtain quantitative information and documents before any recommendation is made and/or implemented
• Analysis
  • Analyze the data and evaluate to what extent the goals, needs and priorities can be met with the available resources and actions
• Develop and present the financial planning recommendation(s)
  • Consider sufficient and relative alternatives
  • Develop the recommendation(s) based on the selected alternative(s) and the course of action in an effort to reasonably meet the client's goals, needs, and priorities
  • Communicate the recommendation in a manner to assist the client in making an informed decision
• Implementing the plan
  • Determine the implementation responsibilities
  • Select the appropriate products and services
• Monitoring
  • Monitoring process may revel the need to reinitiate the steps of the financial planning process

Financial planning is a process, not an event and is never finished. I have always liked the saying that financial planning is a journey with now as your starting point and your goals and dreams as the destination.

Comments

[dimes]

That sounds similar to the process an AFC goes through. I think there are officially four steps, but a couple of them are clumped together. 1, 2, 3&4, and 5&6. Counselor controls the process, client controls the content.