I fail to understand why someone is permitted to be called a financial planner if he/she doesn't actually write financial plans. Most of these so-called financial planners do sell investment and/or insurance products but fail to integrate the implementation of these products into a complete financial picture for their clients.
This is in stark contrast to what a real financial planner will do, which is follow these six steps:
- Setting goals and objectives is the first step of any financial planning process - if you do not know where you are going, how can you know when you get there, or even decide which route to take? Setting goals and objectives is the foundation of any sound financial plan.
No matter where you are heading, you need to assess where you are now, and what you already have in place for the journey.
- Data gathering will ensure that your personal documents are up-to-date and that you know your current financial situation.
- Heading in a general direction won't guarantee success in reaching your final destination. Before heading out on your journey, do your analysis and find solutions. This strategy will assist you in reaching your stated goals and will provide you with a roadmap to help you achieve these goals.
- Your financial plan should confirm that your goals are achievable, and appropriate recommendations will help define what you need to do to ensure that you reach these goals.
- A financial plan is only helpful if the recommendations are put into action. Implementing strategies will assure you reach your destination.
- Finally, follow-up and annual reviews are critical to ensuring you maintain a clear focus in order to succeed.