Financial Planning


The Six Steps 

1.       Establishing client-planner engagement

a.  Explain issues and concepts related to overall financial planning process, as appropriate Explain services provided, the process of planning, documentation.

b.     Clarify client’s responsibilities.

c.     Clarify CFP licensee responsibilities. Disclosure (compensation and conflict of interest) 

d.     Engagement letter—uses and requirements 

2.       Gathering client data and determining goals and expectations

a.     Obtain information through interviews/questionnaire about financial resources and obligations.

b.     Determine client’s personal and financial goals, needs and priorities.

c.     Determine client’s values, attitudes and expectations. 

3.       Clarifying client’s present financial status and identifying problem areas and opportunities

a.     Current financial status (e.g. cash flow, net worth, tax projections)

b.     Capital needs

c.     Risk management needs and coverage

d.     Investments

e.     Taxation

f.       Retirement

g.     Employee Benefits

h.     Estate Planning

i.      Special Needs

1.     Divorce/remarriage considerations

2.     Charitable planning

3.      Adult dependent needs

4.     Disabled child needs

5.     Education needs - e.g. Registered Education Savings Plans (RESP’s)

6.     Terminal illness planning

7.     Closely-held business planning

 4.      Developing and presenting the financial plan

a.    Develop and prepare a client-specific financial plan to meet client goals and objectives Provide projections and recommendations

b.     Present and review the plan with the client

c.     Collaborate with client to ensure plan meets goals and objectives, revise as appropriate

 5.      Implementing the financial plan

a.      Assist the client in implementing the recommendations

b.     Coordinate as necessary with other professionals, such as accountants, lawyers, real estate agents, investment advisors, investment fund sales representatives, and insurance agents/brokers

6.       Monitoring the financial plan

a.      Monitor and evaluate soundness of recommendations

b.      Review the progress of the plan with the client

c.    Discuss and evaluate changes in client’s personal circumstances (Eg: birth/death, age,    illness, divorce, retirement)

d.      Review and evaluate changing lax laws and economic circumstances

e.      Make recommendations to accommodate new or changing circumstances

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