Establishing Financial Direction Chapter 5 Establishing Financial Direction

The Process

The Client/Planner Worksheet Helps the planner and client establish financial direction in a concise and systematic manner

Sample Client/Planner Worksheet

Step 1: Establish the Client-Planner Relationship Establish relationship of trust and open communication with client Discuss decision-making and length of relationship The financial mission A broad and enduring statement that identifies the client’s long-term purpose for creating a financial plan Ensures understanding between the client and planner about why the plan is being created and implemented Provides a basis for the generation of goals, objectives, strategies, and alternatives

Step 2: Gathering Client Data and Determining Client Goals and Expectations Identify relevant environmental information Establish financial goals Develop financial objectives

Step 3: Determining the Client’s Financial Status Insurance planning and employee benefits Investment planning Income tax planning Retirement planning Estate planning

Step 4: Develop and Communicate the Financial Plan

Select the Most Appropriate Strategy A collaborative effort between planner and client The planner Ensures that the client understands all of the aspects of the alternative strategies Educates the client on how to analyze the selection in a systematic and quantitative manner. The client makes the final decision and is ultimately responsible for implementing the plan.

Step 5: Implement the Financial Plan The planner can: improve the probability of successful implementation by ensuring the client has a detailed understanding of the current strategy; measure progress toward attainment of objectives; and adjust the plan as necessary through periodic monitoring.

Step 6: Monitor the Financial Plan Establishing targets and measures aid in monitoring the client’s progress toward attaining objectives. A minimum of one target and one measure should be established for each objective. Both the planner and the client should monitor targets and achievement. Periodic monitoring of the plan is critical It may be necessary to modify the plan