Financial Planning

Financial planning is the process of determining whether and how an individual can meet life goals through the proper management of financial resources. Financial planning integrates the financial planning process with the financial planning subject areas. In determining whether the advisor is providing financial planning or material elements of financial planning, factors that may be considered include, but are not limited to:

  • The client's understanding and intent in engaging the advisor
  • The degree to which multiple financial planning subject areas are involved
  • The comprehensiveness of data gathering
  • The breadth and depth of recommendations

Financial planning may occur even if the material elements are not provided to a client simultaneously, are delivered over a period of time, or are delivered as distinct subject areas. It is not necessary to provide a written financial plan to engage in financial planning.

Financial Planning Process

Financial planning is a process which typically includes, but is not limited to, some or all of these six steps:

  1. Establishing and defining the client-planner relationship,
  2. Gathering client data including goals,
  3. Analyzing and evaluating the client's current financial status,
  4. Developing and presenting recommendations and/or alternatives,
  5. Implementing the recommendations, and
  6. Monitoring the recommendations.

Personal Financial Planning Subject Areas

Personal financial planning subject areas are covered in the financial planning process which typically include, but are not limited to: