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The Financial Planning Process

Financial planning or wealth planning is the process of creating an achievable roadmap for your life’s goals. The financial planning process involves several intensive steps, such as: 

Defining your financial goals

Assessing your current financial situation

Developing a realisable plan of action

Implementing that plan

Monitoring and adjusting 

Whether saving for retirement, paying off debt, or planning for a major purchase or life event, tailored financial planning means the difference between success and failure. The financial planning process itself must be well-structured, thorough, and comprehensive. 

After painting a complete picture of your finances, the capable advisor defines the primary realisable goals relevant to you and how to achieve them. Of course, the ultimate goal remains long-term financial stability and success through the well-ordered mind. 

This article explores the five essential steps that are the foundation for a well-ordered financial planning process. In the greater scope of wealth management, financial planning continues to be a complex speciality requiring both experience and compassion. 

Defining Your Financial Goals 

As the critical first step of the financial planning process, it helps you clarify what you want, what’s achievable, and what you want to achieve in the long term. Further, it provides a path forward. There are five considerations to keep in mind. 

Short- vs long-term. We must identify whether your goals are short-term (less than one year), medium-term (one to five years), or long-term (more than five years). This aids goal prioritisation and the relevance level of available strategies. 

Measurable. After time durations are determined, we examine the specific numbers to which we must hold ourselves accountable. This lets us see where we could have met specific objectives. 

Realistic. Ambitious goals come with high risk, while realisable goals enable us to moderate that risk, especially over longer durations. Considering the current income stream, we can identify any weak points and define strategies for remedying them. 

Prioritised. An essential question inside any financial planning process: what can we do without, and what is imperative? Pre-paying school fees for possible tax benefits is a high-priority item, while an additional car is not. 

Value-aligned. Your values and priorities dictate how you spend your disposable wealth. Otherwise, why hire a financial planner? Your passions and beliefs should enter many of your financial and life goals.

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