Financial planning is a process in which clearly defined goals are established and specific action steps are identified to help achieve them. When we sit down with a potential client in our first meeting and ask them whether or not they have a financial plan, many of them will answer “yes”. If we ask them to describe it, they will generally list out their different investment accounts. These accounts aren’t a financial plan–they are ingredients that are part of a plan. When creating a financial plan we follow the following 5 step process:

Step #1:  Identification & Prioritization of Goals

In this initial step we work with our client to have them identify and prioritize short, mid, and long term goals. Goal examples could be “My wife and I want to retire by the age of 62”; “I want set aside enough money to fund my children’s college education”; “I want to have enough capital to start my own business in the next 5 years”. We use these goals to determine the specific information we will need to gather in step 2.

Step #2:  Data Gathering and Analysis

After identifying and prioritizing each goal, we collect the relevant information. There are two types of information we collect–quantitative and qualitative. One deals with hard numbers such as “I have $50,000 in savings”. This would be quantitative data. An example of qualitative would be an individuals tolerance for risk. We use client specific question exercises along with bank account, investment, and insurance statements to give us the information we need for analysis and ultimately to make recommendations off of.

Step #3:  Presentation of Plan

With the use of our sophisticated financial planning software, we are able to create in-depth written financial plans. One of the advantages of our software is that it allows us to project and model different scenarios such as changes in taxes, fluctuating investment returns, social security, and many other items. As we communicate the plan, we make sure that our communication style boils down sophisticated concepts to their essence for easy understanding. We speak plainly and clearly without the use of jargon.

Step #4:  Implementation of Recommendations

Our financial plans give our clients the flexibility to decide if they wish to execute all of the recommendations all at once or progressively over time. When a plan calls for the services of an additional financial professional such as attorney or CPA, we will coordinate the implementation of the plan with them on your behalf.

Step #5:  Ongoing Monitoring and Adjustments

Personal financial plans are living, breathing documents that will change each and every year based on the changes in our clients financial lives, the financial markets, and legislative and tax changes. Our job is monitor the tax and investment environment and communicate with the client. We meet with our clients several times a year to provide an update on their investment performance, discuss financial planning topics, and receive updates on their financial situation to make any plan updates as needed.