Financial planning consists of six distinct steps including the establishment of the client-planner engagement, gathering client data, determination of the client's current financial situation, developing and presenting the financial plan, executing the plan, and then providing ongoing monitoring to ensure the plan continues to meet the objectives. If you are looking for comprehensive financial planning guidance, these are the steps that should guide your planner. Be familiar with them. They will help you get the most out of the process. It is this 'big-picture' approach that sets financial planners apart from all other financial advisors who may have been trained to focus only on one aspect of your finances.

Here is a summary of each of the 6 steps...

1. Establish the client—planner engagement

Your planner should:

  • Explain issues and concepts related to the overall financial planning process that are appropriate to you.

  • Explain the services he or she will provide and the process of planning and documentation.

  • Clarify your responsibilities as a client.

  • Privacy issues, which are paramount to some, should be addressed at this stage to ensure that the planner is able to obtain enough information to develop the financial plan.

  • Clarify his or her responsibilities as your planner. This should include a discussion about how and by whom he or she will be compensated.

You and your planner should:

  • Discuss the scope of the client/planner engagement.

  • Agree on how decisions will be made.

2. Gather client data and determine goals and expectations

Your planner should:

  • Obtain information about your financial resources and obligations through interviews or questionnaires.

  • Gather all the necessary documents before giving you the advice you need. Explain issues and concepts related to the overall financial planning process that are appropriate to you.

You and your planner should:

  • Define your personal and financial goals, needs and priorities.

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

  • Remember, any goals established should be:

  • Specific - otherwise they are not goals, they are merely dreams and wishes. “I require 75% of my current income in retirement” is an example of a specific goal. “I want to be rich when I retire” is a dream, not a goal.

  • Measurable - financial goals are easily measurable since dollars and cents can be counted.

  • Realistic and attainable - the planner can help determine whether a goal is workable or not.

  • Time bound - all goals should be time bound in order to track progress towards the goal’s completion and to provide feedback. Corrections should be made in the action plan therefore maximizing the probability of success.

3. Clarify your present financial situation and identify any possible problem areas and opportunities

Your planner should:

  • Analyze your information to assess your current financial situation. (cash flow, net worth, tax projections, etc.).

  • 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.)

4. Develop and present the financial plan

Your planner should:

  • Develop and prepare a written financial plan tailored to meet your goals and objectives, values, temperament and risk tolerance, while providing projections, recommendations and alternate solutions.

  • Present the plan to you and establish an appropriate review cycle.

You and your planner should:

  • Work together to ensure that the plan meets your goals and objectives.

5. Implement your financial plan

Your planner should:

  • Create a long term investment portfolio with the correct asset allocation, i.e. proper diversification. Studies show this is responsible for up to 90% of the investors ultimate investment success.

    Then the long term portfolio should be analyzed to ensure a proper balance between registered and non-registered investments. Lastly, the firm should make the investments by choosing the industry's best managers without being biased by limited in-house products.

  • Recommend an appropriate short term reserve investment as this will be structured very differently than the long term portfolio.

  • Shop the industry for the best insurance providers for your specific situation as required. Help you make informed risk management choices.

  • Provide advice and referrals to a network of lawyers, accountants, home and auto insurance specialists and lenders. Address all aspects of your plan as required.

6. Monitor the financial plan

Your planner should:

  • Continually review and monitor first your portfolios asset mix and secondly your chosen managers and products within your account.

  • Regular review meetings address:

  • A discussion about changes in your personal circumstances and how they might affect your goals.

  • A review and evaluation of the impact of changing tax laws, economic circumstances and markets.

  • Regular rebalancing of portfolio.

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Mutual Funds and Segregated Funds provided by the Fund Companies are offered through Worldsource Financial Management Inc., Other Products and Services are offered through Perler Financial Group


Harry Perler 131x150


Certified Financial Planner

Worldsource Financial Management


Harry Perler 131x150


Certified Financial Planner

Worldsource Financial Management


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