Financial planning is a broad, comprehensive process. It’s this big picture approach that sets qualified financial planners like CFP® professionals apart from all other financial advisors who may have been trained to focus only on one aspect of your finances. 

A good financial plan takes into account all aspects of your finances, balancing what you need and want today with the personal goals you have for the future. Read on for what to expect when you get started on a professional financial plan.

Establishing the client/planner engagement

Your planner should:

  • Explain issues and concepts related to the overall financial planning process that are appropriate for you
  • Explain the services she/he will provide and the process of planning and documentation
  • Clarify your responsibilities as a client
  • Clarify their responsibilities as your planner, including a discussion about how and by whom she/he will be compensated

You and your planner should:

  • Discuss the scope of the client/planner engagement
  • Agree on how decisions will be made about how she/he will be compensated

Determining your goals and expectations

Your planner should:

  • Make every effort to understand your life goals and how your finances can impact those goals
  • Obtain information about your financial resources and obligations through interviews or questionnaires
  • Gather all necessary information and documents before giving you the advice you need

You and your planner should:

  • Investigate your values, preferences, financial outlook and desired results as they relate to your financial goals, needs and priorities
  • Define your personal and financial goals, needs and priorities

Clarifying your present financial status and identifying problem areas and opportunities

Your planner should:

  • Analyze your information to assess your current situation (including cash flow, net worth and tax projections)
  • Identify any problem areas or opportunities with respect to your:
    • Capital needs
    • Risk management needs and coverage
    • Investments
    • Taxation
    • Retirement planning
    • Employee benefits
    • Estate planning
    • Special needs (i.e. adult dependent needs, education needs, etc.)

Developing and presenting the financial plan

Your planner should:

  • Develop and prepare a financial plan tailored to meet your goals and objectives, values, and risk tolerance, while providing projections and recommendations
  • Present the plan to you
  • Establish an appropriate review cycle

You and your planner should:

  • Work together to ensure that the plan meets your goals and objectives
  • Assist you in implementing the recommendations discussed (if that's what you want). This may involve coordinating contacts with other professionals such as investment funds sales representatives, accountants, insurance agents or lawyers.

Implementing the financial plan

Your planner should (if they are in charge of the process):

  • Periodically contact you to review the progress of the plan and make necessary adjustments to the recommendations to help you achieve your goals. This review should include:
    • A review and evaluation of the impact of changing tax laws and economic circumstances
    • A review of your life circumstances, and an adjustment of the recommendations if necessary. Circumstances often change through life events such as a birth, death, illness, marriage or retirement

Monitoring the Financial Plan

You and your planner should:

  • Agree on who will monitor and evaluate whether your plan is helping you progress toward your goals.

For more information about the financial planning process, read FAQ: Financial Planning, Choosing a Financial Planner and Your annual financial planning "checkup".