The Six Steps Involved In Financial Planning

By Author: harlod meck
Total Articles: 20
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In the current recession situation faced by people all around globe, financial planning becomes highly essential. There are financial planners to help out people in this respect. Generally, professionals are of the opinion that this sort of planning can be done as a six-step process and they are listed below:

1.Establishing and defining relationship with client
2.Gathering of information from client for evaluation
3.Analyzing and evaluation of financial status of client
4.Development and presentation of monetary planning recommendations
5.Implementation of planning recommendations
6.Monitoring of plan

A detailed insight of these six steps are discussed below:

1.Establishing and defining relationship with client: The first step is to discuss the scope of engagement with the client. Before providing any such service, the service provider and the seeker will have to mutually define the scope of relationship. This process can include identification of the service to be provided, determining the responsibilities of the parties involved, disclosing details about any conflict of interest ...
... for the financial planner and disclosing the practitioner’s salary or fee.

2.Gathering of information from client for evaluation: This step is meant for determining the goals of client with respect to personal and professional life related to finances. Here, quantitative and numerical data is collected from the client in such a way that appropriate evaluation can be done.

3.Analyzing and evaluation of financial status of client: Here, the evaluation of the present situation is done. This step is compulsorily carried out by professionals before giving any sort of financial advice. This will be helpful for the service provider to judge the current and future monetary aims before giving a suitable advice.

4.Development and presentation of monetary planning recommendations: Here, the different alternatives available according to the financial situation of the client are evaluated and accordingly a statement of recommendation will be prepared by the professional to suggest the individual seeking his advice to move towards his monetary goals in the right perspective.

5.Implementation of planning recommendations: In this step, the individual will be agreeing to carry out the financial advice given by the expert and here comes the mutual agreement between both the parties.

6.Monitoring of plan: This is the final step and it is a continuous process as well. Here, the plans are regularly reviewed for finding whether they will be suitable for the appropriate situation with respect to monetary stands of the client.

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