1. YOUR FIRST MEETING
At your first meeting, you’ll usually discuss the financial planning process, what you would like to accomplish and how your CFP® professional can help you. Your advisor knows that the first step is to discuss the services that he or she will provide you, give you information on his or her background, detail how you will pay for products and services, detail how they will be compensated, and disclose any conflicts of interest.
2. FINANCIAL PLANNING BEGINS
Once you agree to the scope of the financial planning engagement, including any conflicts of interest, the next step is for your CFP® professional to begin providing financial planning. Their first job is to gather information about your current finances and talk with you about your needs, priorities and goals. This is the time to discuss issues such as risk tolerance and your exposure to longevity, economic, liability and health-care risks.
3. ANALYZING YOUR FINANCIAL STRENGTHS AND VULNERABILITIES
Your CFP® professional will want to analyze the strengths and vulnerabilities of your current financial situation and course of action. Depending upon your personal circumstances, this includes your cash flow, asset protection, employee benefits, emergency fund and other financial data.
4. DEVELOPING FINANCIAL PLANNING RECOMMENDATIONS
The next step is to develop recommendations to help you meet your goals, explain the assumptions that are used to develop the plan and offer alternatives. When he or she presents that plan, the process is designed to give you the opportunity to provide feedback and ask questions.
5. PUTTING YOUR FINANCIAL PLAN INTO ACTION
Now it is time to put the plan into action. If your planning agreement includes implementation and monitoring, you will need a timeline for implementation, as well as details defining what will be monitored and how often, and when the recommendations will be updated.
6. EXPECT A COLLABORATIVE PARTNERSHIP
This is a collaborative process. You will need to work together to review the performance and progress of the plan through time. When there are changes in your personal circumstances (such as a change in employment or family status), that may call for adjustments to your plan. Throughout the process, your CFP® professional is able to provide ongoing support, guidance and education.