The Financial Planning Process

Question 1

The financial planning process follows six key steps to ensure effective financial advice and management.

List the six steps in sequence

Answer 1

1. Establish & Define the Client-Adviser Relationship:
   The financial planner and client agree on the scope of services, responsibilities, fees, and expectations to ensure clarity and trust.
2. Gather Client Data & Determine Goals:
   The financial planner collects detailed personal and financial information from the client to understand their current situation and future goals.

3 Analyse & Evaluate the Client’s Financial Status:
The planner assesses the client’s financial position, identifying strengths, weaknesses, and potential risks or opportunities.

4. Develop & Present the Financial Plan:
   A customized financial plan is created with recommendations that align with the client’s goals, which is then presented and discussed with the client.
5. Implement the Financial Planning Recommendations:
   The agreed-upon financial plan is executed, ensuring proper actions are taken to meet the client’s objectives.
6. Monitor the Financial Plan & Relationship:
   The financial planner regularly reviews and adjusts the plan based on the client’s progress and any changes in circumstances or market conditions.