The process of financial planning involves gathering relevant financial information, setting life goals, examining your current financial status and coming up with a strategy for how you can meet your goals given your current situation and future plans.

You can do your own financial planning, but you may decide to seek help from a professional financial planner if:

  • You need expertise that you don't possess. For example, a planner can help you evaluate the level of risk in your investment portfolio, or adjust your retirement plan due to changing family circumstances.
  • You want to get a professional opinion about the financial plan you developed for yourself.
  • You don't have time to spare to do your own financial planning.
  • You have an immediate need, or unexpected life event, such as a birth, inheritance or major illness.
  • You feel that a professional adviser could help you improve how you are currently managing your finances.
  • You know that you need to improve your current financial situation but don't know where to start.

    The planner can look at all of your needs including budgeting, saving, taxes, investments, insurance and retirement planning. Or, the planner may work with you on a single financial issue, but within the context of your overall situation. This big picture approach to your financial goals sets the planner apart from other financial advisers, who may have been trained to focus on a particular area of your financial life.

    The financial planner helps you by:

    1. Establishing a professional relationship
    The financial planner should clearly explain the services to be provided to you, and define both his and your responsibilities. The planner should explain fully how he will be paid, and by whom. You should agree on how long the professional relationship will last, and on how decisions will be made.

    2. Gathering data, including goals
    The financial planner should ask for information about your financial situation. You should define your personal and financial goals together, and understand your time frame for results and discuss, if relevant, how you feel about risk. The financial planner should gather all the necessary documents before giving you the advice you need.

    3. Analysing your financial status
    The financial planner should analyse your information to assess your current situation and determine what you must do to meet your goals. Depending on what services you have asked for, this could include analysing your assets, liabilities, cash flow, current insurance coverage, investments or tax strategies.

    4. Developing recommendations
    The financial planner should offer financial planning recommendations that address your goals, based on the information you provide. The planner should go over the recommendations with you to help you understand them so that you can make informed decisions. The planner should also listen to your concerns and revise the recommendations as appropriate.

    5. Implementing recommendations
    You should agree on how the recommendations will be carried out. The planner may carry out the recommendations, or serve as your "coach", co-ordinating the whole process with other professionals, such as attorneys or stockbrokers.

    6. Monitoring recommendations
    You should agree on who will monitor your progress towards these goals. If the planner is in charge of the process, he should report to you periodically to review your situation and adjust the recommendations, if needed, as your life changes.


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