Broker Check

Financial Planning

A new client relationship usually begins by developing a comprehensive financial plan. It provides the basis for making informed financial decisions that best address the unique situations of the client.

The financial planning process can be broken down into the following six steps:

  1. Determine and define the scope of relationship with the client
  2. Gather the client’s data for evaluation
  3. Analyze and evaluate the client’s financial situation
  4. Develop and present the financial planning recommendations and strategies
  5. Execute the financial planning recommendations
  6. Monitor the plan

The following is a more detailed insight of what happens during each step of the process.

Step 1. Determine and define the scope of relationship with the client

Prior to providing any financial planning service, we meet with the client in order to mutually define the scope of the engagement. This important process of mutually defining and agreeing to the scope helps to spell out the type of activities that are necessary for a realistic understanding between the client and us. The provision of the service may include but is not limited to:

  • Identifying the services to be provided.
  • Disclosing any material conflict of interest.
  • Disclosing our form of compensation.
  • Determining our mutual responsibilities.

Step 2. Gather Client Data

This step is an engagement to find out more about the client and covers the following areas:

  • Determining a client’s personal and financial goals and priorities.
  • Obtaining quantitative information and documents from the client.

Step 3. Analyze and evaluate the client’s financial situation

During this step, we review the client’s data to thoroughly understand the client’s financial situation. We can then determine how much of the client’s financial goals and priorities can be met by the available resources.

Step 4. Develop and present the financial planning recommendations and strategies

We determine and evaluate all reasonable strategies available for the client. We then develop suitable financial planning recommendations, taking into account step (3) above. We then present it to the client for joint discussion and agreement on implementation.

Step 5. Execute the financial planning recommendations

During this step, the client approves the type of recommendations or strategies to be implemented. We then together mutually agree on the type of services (if any at all) to be provided.

Step 6. Monitor the plan

This step involves monitoring and reviewing the recommendations and the client’s progress. It also involves reviewing and discussing with the client the changes (if any) in his personal circumstances as well other new situations e.g. changing tax laws.

Financial success is pursued by following this six-step process.