This is the first in a multi-part post discussing the financial planning process. Each step will be discussed in more detail in a subsequent post.
This graphic is an overview of the 7-step financial planning process.
Source: CFP Board Roadmap To The Code Of Ethics & Standards Of Conduct
Step 1 – The client’s personal and financial circumstance are analyzed, and any incomplete information should be addressed.
Step 2 – Client goals should be identified and prioritized.
Step 3 – Analyze the current course of action and determine potential alternatives.
Step 4 – Develop financial planning recommendations designed to maximize the potential for meeting the client’s goals.
Step 5 – Present the financial planning recommendations and discuss whether to modify the goals or recommendations.
Step 6 – Implement the financial planning recommendations and who should implement which recommendations.
Step 7 – Monitor the progress with respect to meeting the client’s goals.
After changes in life, i.e. the birth of a child or the death of a loved one, or after some time has passed, i.e. a year, the client’s circumstances should be again analyzed and the process repeated to address the changes.