If you are not working in your client’s best interest then why are you a financial planner? Seriously. Our clients’ hopes, dreams and goals are at the core of everything we do. Everything. Creating an understandable, actionable plan to meet those hopes, dreams and goals is why we do what we do. Done right, and a dream trip through Greece is possible; done carelessly, and they can say hello to the part-time job during retirement that they wanted to avoid. There’s a lot riding on what we do and there is no “one size fits all” approach. Enter a comprehensive financial plan.
For Registered Financial Planners (R.F.P.s) a comprehensive financial plan is what sets us apart from the rest (well, that and our ethical standards). It is the process that guides our ship and governs our work. To build one, the top priority is your client’s relevant personal and financial data, goals, and concerns. If you’re thinking this is all about money, you’re wrong. It’s about how they want to live, money is just one facet of that. Fundamental to the comprehensive financial plan is the “Six-Step Process.” It’s a blueprint for getting your client from where they currently are to their dreams, with greater confidence and ease – now that’s a win-win.
Comprehensive Financial Planning and the “Six-Step Process”
It Starts With Your Client
In order to go where you need to go, you need to know where you are. That’s why the first step is to gather all relevant and current financial information from your client, such as details of assets and liabilities, income and expenses, tax returns, insurance policies, employment benefit and pension details, and estate planning documents. Basically, you need to clarify your client’s present situation. In order to work through every other step, this one needs to be completed as thoroughly as possible.
Dream A Little Dream
Now that you know your client’s current situation, let’s find out where they want to go. You must learn their specific goals and objectives. Think of it as an interview. Talk to them and find out what they want out of life. Seriously. It’s not all about the money, it’s about how the money will help facilitate their goals. It may be something practical, like ensuring that their children’s education is paid for, maybe they want to retire at age 55 and work on their golf game, maybe they just want to take that once in a lifetime trip; maybe it is all three options! Listen and learn. This is a critical step that will guide plan development and implementation.
Problems & Opportunities
If you were using Google Maps, you would have the start and end points. It’s your job to find out where the traffic is bumper-to-bumper. With knowledge of both their personal goals and their current financial position, you can determine whether there are any issues or threats to a client reaching their end destination. You will also identify opportunities that will allow them to meet their goals – it’s why they need you, otherwise, they could do it alone. For example, they may not be taking advantage of all the income tax deductions and credits available, or they may have too much or too little insurance. Remember, you add value, your expertise is why your client comes to you, so use your knowledge and experience to outline the best path.
Customized, Customized, Customized
A goal without a plan is just a dream. We’ve all heard that. Because no two people are alike, your recommendations will be specific to your client’s goals and will vary with the complexity of their individual circumstances. There is no one size fits all approach. In some cases, you may need to provide alternative solutions. This is where Registered Financial Planners excel.
Determine which recommendations your client is comfortable with and who is responsible for what. Because this step sets out milestones, timelines and deliverables, with recommendations to achieve these, it is essential that you clearly communicate these recommendations so that your client understands them. No financial insider babble – speak to them on their terms, in a language they’ll understand.
Let’s make it happen now – implement the plan. This is a key step to ensure that your clients reach their goals and objectives. You may assist them with implementation where appropriate, or refer them to other appropriate professionals if need be.
Once the journey has started, you will need to look at the map from time to time. A financial plan needs to be reviewed and revised periodically, in order to take into account changes in your client’s personal circumstances or changes in the economy. For most individuals, an annual review is appropriate.
This six-step process provides a well-designed financial plan that will help your client reach their personal financial goals and objectives, and give them a greater sense of security. It is just one of the many ways Registered Financial Planners provide more comprehensive and knowledgeable solutions to help their clients achieve a better quality of life. We’ve been at the forefront of efforts to better differentiate financial planners from other advisors for years, working to elevate our profession. There are well over 20,000 Canadians calling themselves financial planners – stand out with an R.F.P. designation. The list of benefits is long – take a look. If you want to chat, call us at 1-888-298-3292, or email at firstname.lastname@example.org