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WHAT IS FINANCIAL PLANNING ?

Financial planning is a process of setting objectives, assessing assets and resources, estimating future financial needs.
To achieve your goals, many elements are involved in  personal financial planning.
Financial planning tools include investing asset allocation, risk management, taxation, life cover, retirement, insurance,
and estate and trust planning.

Always remember Financial planning is a process and not a product!
Financial planning services of a personal financial planner can make a huge difference to your financial future.
You need to move in this direction to achieve your goals and helps you create a stable future and improve your financial status.


It is globally accepted that there is a financial planning process that must be followed that ensures you receive sound financial planning advice.
A financial planner will implement the six-step financial planning process.
 
The Six-Step Financial Planning Process
  • 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,  personal and financial objectives, needs and priorities,short to long-term financial goals and your circumstances.  Collect qualitative information and documents.

  •   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,  obejectives, needs and priorities.  Cash flow, current risk cover, investments and tax strategies.

  • 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 manner 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 authorise 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 costed in a fee- 
          based environment. 

The service must be customized to your requirements;  regular review and re-evaluate  meetings will be scheduled over the ensuing years.
At these meetings, you 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.
Reviews should be requested when you experience any life changing events - for example, the birth of a child, sickness or divorce.  This will enable your financial planner to adjust your plan accordingly.

  


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