Preparing for Financial Planning

Paul Morrone |

A true financial planning engagement is extremely comprehensive. Many people have the misconception that such an engagement merely entails reviewing an existing portfolio or the creation of a portfolio. That review is to determine what is suitable for the person given their time horizon before funds will or need to be accessed and what level of risk they are willing to assume. Though this exercise is definitely part of a financial planning engagement, it is only one of numerous items that are reviewed and discussed. So what is reviewed and how does someone come prepared to the first meeting?

There is a formal process to financial planning that entails 6 steps:

*  establishment of goals and objectives

*  gathering relevant data

*  analyzing that data

*  making recommendations

*  implementation

*  ongoing monitoring to see if adjustments to the plan are needed

We provide clients with a very detailed questionnaire that covers a wide range of topics that goes way beyond the portfolio. The gathering of data to complete the questionnaire is an instrumental exercise and provides a foundation and starting point for conversation. Someone's feelings about money, their cash flow, the legacy they want to create, the family they want to protect and their past experiences and future desires are just as important if not more important than any financial information. It would be difficult to generalize about financial planning because each engagement is unique. Everyone brings something "different to the table". As a result of the uniqueness to each engagement, our clients say we "tailor strategies to manage their financial future". The key word is tailor. There is no cookie cutter approach.

So how can you prepare for financial planning? Obviously gathering of all your financial information as well as tax returns, insurance policies, cash flow analysis, wills and trusts and all related legal documents represents a partial list. It goes way beyond this anal list and the subjective and personal items that I previously mentioned ties everything together. This type of engagement is definitely not for everyone and may not be cost justifiable. For those people that have complex financial or business situations or unique family dynamics, such a process can be extremely beneficial.

Do I have you thinking?  If you feel such an exercise would be appropriate, give us a call to discuss.

Until the Next Tom's Take...