1 We begin with a No Obligation Consultation to confirm that I can help with your particular situation. We’ll discuss your goals, current circumstances, and specific needs. This is important for both of us to decide whether I’m the right planner for you, and whether you are ready to create a comprehensive financial plan.
With a well-done and fully implemented financial plan, you should end up with a structured system and improved financial security, but creating it does require a significant upfront commitment of time and money.
2 If you decide to work with me, I will provide you a Letter of Engagement. This is the contract that lays out:
- the scope of the plan — what areas will be addressed
- the estimated time commitment and completion date.
- what I will do, and what you will need to do
- what fees are payable and when they are due
If you haven’t received them before this point, you will also receive full company information – disclosures, billing policy, liability waivers, etc.
3 The Data Gathering step is the part requiring the majority of your time commitment.
- You will need to gather many documents and meet with me for one or more appointments.
- We will go over all aspects of your life, including your current situation and goals for the future.
- To get the most out of the plan it’s important for you to disclose all facts and thoughts, whether you feel them relevant or not.
- If you have any concerns about the financial plan procedure, please bring them up early in the process.
4 We will start to talk about the Assumptions needed to create your financial plan. There are many of these and they are often imperative to the success or failure of the plan.
Assumptions include (but are not limited to):
- Inflation rates
- Salary increases
- Returns of different investment types
- Tax rates
- Life expectancy
We will do the best we can to accurately predict the future, using conservative assumptions as appropriate. Note, all assumptions need to be updated at least annually, are variable, ultimately unpredictable, and are subject to change.
5 Next, I start the majority of my work. This involves analyzing your current situation and considering future scenarios in many areas of your life. I will check in with you periodically to ensure we are on the same page and to get additional information.
The financial plan consists of multiple sections. Here is the brief outline of what I will be looking at in each of these:
Do you need help controlling your spending, saving money, or reducing debt?
I will prepare financial statements showing your current:
- Net worth
- Statement of cash flowI then create forecasts and projections of all these items in your future as well.I will provide you tips and assistance with:
- Value-based spending
- Saving for your goals
- Reducing debt
- Getting over past mistakes
- Talking to others about money
- Other money management areas as neededI will work with you to prepare a plan for your current and future income and expenses.Insurance Planning
Are you and your family adequately protected?
- Determine your current insurance needs, based on financial status, health, employment, age, etc.
- Analyze how well your current insurance is meeting your actual needs.
- Help you determine if you over or under-insured in any areas.
- Explain insurance terms and considerations to ensure you get what you need in a policy.
- Provide you referrals and/or assist you in reviewing insurance quotes.
When do you want to retire and how do you want your retired life to be?
- Formulate various scenarios based on our previous discussions of your preferences and goals.
- Help you understand any company pension plans.
- Create projections for your money leading up to, and after retirement.
My analysis will include:
- How much money you will need to save to reach your goals.
- What asset allocations are reasonable.
- What investment vehicles may be appropriate.
- Taxes payable in retirement.
- What money you will use and when.
If you have children or are planning to return to school.
- Determine the likely costs of post-secondary education.
- Give you options for saving and investing methods.
- Provide tips for taxes and spending while in school.
This is related to all the other planning areas.
- For each goal, I’ll help you decide on reasonable investment methods.
- I will provide general education regarding common investing strategies, terms, and costs.
- I can help you review any recommendations from an investment advisor.
- We’ll discuss if self-directed investment strategies are appropriate for you.
- I’ll refer you to investment professionals when appropriate.
Do you have a will, insurance, and a plan for the distribution of your assets and care for your family members if you pass away?
- Provide general education about what may happen at death regarding taxes, asset transfers, insurance, etc.
- Discuss with you what might be contained in a will. You will need lawyer to actually execute it, and I can refer you.
- Help you create instructions for your spouse, children, or executor.
Income Tax Planning
It’s an inescapable area, and is related to all other aspects of the plan.
- Explain strategies for legal tax reduction, such as: income splitting, investment methods, and when to claim tax credits and deductions.
- Create a plan for your taxes, from now, until death.
- Assist you complete your tax returns, if needed.
Your Money and Your Relationships
Do you have a spouse, children, parents, or others in your life?
- Help you to navigate the difficult waters of money management and other people.
- Provide tips for money management with your spouse.
- Discuss with you about teaching your children about money.
- Give you options in dealing with parents and other relatives about their own money difficulties.
Risk Management Planning
This is related to all other areas of the plan.
You will end up having plans in place for the unexpected, including emergency funds, insurance, estate planning, and other topics as appropriate for your life.
All of the above will be fully documented, graphed, and summarized. Then we will meet again.
6 Now, you pick your Strategies. I’ll present all my findings and we’ll discuss the pros and cons of each. Some of your goals may not be attainable. You will have to decide where your priorities lie.
7 It’s time to Finalize your plan. I will use your chosen strategies to prepare a formal financial plan including all the information, charts, projections, and scenarios previously made.
8 Together we will Implement your plan. We will get together to discuss the next steps. This is where you take over again. Most of the implementation will be up to you, but I will provide as much support as I can. We can discuss and review information you receive from other professionals. I’ll keep checking up on you to make sure you are able to implement the plan. A comprehensive financial plan is worthless without implementation.
9 Going forward, we will both Monitor the plan. Typically yearly, or more often if you have a life change, we’ll review and update the plan. We will make sure the assumptions are still valid, and change them if they are not. And then adjust the plan as your life changes. Although the greatest amount of work is already done, the plan is not static. It is only useful if it is referred back to and updated appropriately.
If you’ve made it to the end of this, congratulations! That’s the first step towards a great financial future. Contact me today and let’s get started.