FINANCIAL PLANNING PROCESS
1. Establishing and defining the professional relationship (first appointment)
As with any relationship, it starts with getting to know one-another; there is no charge or obligation for this meeting. The first meeting will be about establishing this relationship and asking open ended questions to get a deeper understanding of you your family and your goals. This will assist with the formation of a foundation on which to build your financial plan. As the planner, I will share information about myself, my competencies and my services all the time focusing on understanding your needs and goals.
2. Gathering information (including your goals, timeframe and attitude towards risk)
This can be incorporated in the step 1 – however, this discussion is a deeper one as here we find out more about your budget – which includes talking about your current financial obligations, what investments and insurance policies, you already have and tie these up to any short and long term goals you may have This step also involves a discussion on your attitude towards risk – just because you may enjoy ‘bungy jumping’ does not necessarily mean you enjoy taking financial risk – so determining your appetite for financial risk at this stage is very important.
3. Analysing and evaluating your financial status
This is where the financial planner studies your current financial status and looks at what you already have or have not got in place and ties it all up with the goals we discussed in step 1. We look at what needs to be put in place in order to assist you to get your goal and develop a plan based on the information provided at the meetings.
4. Developing and presenting the financial plan
At this point, the financial planner will have a discussion document prepared which captures all the information gathered and ties it up with your goals and objectives. It will contain a summary of your current financial situation and make recommendations of the way forward – these recommendations will be discussed with you to ensure that we are all still on the same page with regards to where you want to be in the future. It covers information on your assets, liabilities, income, expenses and budget.
5. Implementing the financial plan and recommendations
At this stage, after agreement has been reached, we will implement the plan. The implementation will be done by the planner and you will be kept informed of the progress along the way. A record of advice will be drawn up which needs to be signed by both the planner and the client which is a testimony to plan and discussions surrounding it.
6 Monitoring the financial plan
The record of advice referred to above, forms the basis of the plan going forward. Client reviews will be held annually where we will revisit the record of advice and monitor the execution of the plans. Since a financial plan is the start of the journey and many changes occur along the way, it is very important to revisit the plan annually in order to keep it relevant.
