Financial Plan
WHY DO YOU NEED A FINANCIAL PLAN?
Reaching your financial goals is like a trip. While there are many reasons you need a financial plan, here are some to get you started:
- It helps you define your financial goal - A financial goal is something that has a time frame and that can be quantified. A goal such as "I want to be wealthy" is vague and difficult to plan for. The financial planning process will help you define and quantify your goals. A financial plan will help you see whether your goals are realistic and achievable, especially for your timeline.
- It helps you identify how much you will need to save periodically for each of your goals - Whether you want to save for your children's higher education or plan for your daughter's wedding or save for retirement or buy a new house, most financial goals mean periodic savings. But do you know how much? The financial planning process will help you identify how much you will need to save periodically and in total for each of your goals.
- It helps you determine a proper investment allocation - A financial plan will help you align your existing investments to your financial goals and also help you in proper allocation of your investment assets as per the timeline of your goal. The investment allocation should reflect the goals you are trying to attain as well as your tolerance for investment risk.
- It will help you identify risks you hadn't thought of - Do you have enough life insurance, and do you have the right kind of policy for your situation? Do you have critical illness, personal accident and disability cover? Do you need this coverage? Do you know your correct insurance requirement? A financial plan will help identify risks associated with you and will suggest you the right protection based on scientifically calculated human life values.
- It helps you in passing on your wealth to your loved ones without any hassle - Most of us have someone to whom we would like to pass on whatever wealth we have accumulated during our lifetime. Estate planning is a central part of the financial planning and investmentprocess. Do you need a will or a trust? Are your beneficiary designations on retirement accounts and insurance policies up-to-date? What would happen to your assets if you died today? Is this what you intended?
- It will help you build wealth over the long term and make you feel confident about money - A financial plan will help you feel in control of your finances, and also feel a sense of discipline. You will know what exactly you need to do to achieve your dreams, goals and aspirations.
In summary, the financial plan addresses the following important questions:
"What are your long-term financial goals?"
"Where are you now financially and where will you likely be inthe future?"
"What do you need to do to achieve your financial goals?"
In general, the financial planning and investment process can help you take a thorough look at all aspects of your financial life and organize them in the most efficient manner for your situation.
Finally, do you need to hire a fee based financial planner to do all this? Our answer is yes. What a good financial planner will do for you that you cannot do yourself is to take an objective, unemotional look at your situation. We will then apply our expertise, training, and experience to your unique financial needs. Always hire a fee based financial planner, someone who does not earn a commission based on selling you a financial product. This eliminates a huge potential conflict of interest.
Remember:Financial planning and investmentis not a one-time event, but rather an ongoing process. The plan is a base from which to make financial decisions, but the plan can and should change over time based upon changes in your personal circumstances.Together with your Way2Wealth Financial Planning2 Advisor you will be able to achieve your life's goals and aspirations.
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Financial Planning Process
Financial planning process consists of the following basic six steps
- Establishing and defining the client - Planner relationship - If you decide to hire our services a formal Financial Planning Letter of Engagement will have to be signed. After this, our Financial Planning Advisor will explain and document the services to be provided to you and define both his and your responsibilities. The Planner will also disclose any restrictions on his ability to give unbiased advice and disclose any conflicts of interests if any. You are also required to make the payment for the professional fees at this stage. This can happen via personal meeting, email or internet telephony.
- Define goals and gather client data - In this stage our Financial Planning Advisor will seek for information about your financial situation. You and the Planner will mutually define your personal and financial goals, understand your time frame for results and discuss with about your risk profile. Our Financial Planner will gather all the necessary documents before giving you the advice you need.
- Analyzing and evaluating your financial situation - Our Financial Planning Advisor will analyze your information to assess your current situation and determine what you must do to meet your goals. Depending on what services you may have asked for, this could include analyzing your assets, liabilities and cash flow, current insurance coverage, investments or tax strategies.
- Developing and presenting Financial Planning and Investment recommendations and/or alternatives - At this stage our Financial Planning Advisor will offer Financial Planning and Investment recommendations that address your goals, based on the information provided by you. Our Planner will take you through the recommendations to help you understand them so that you make informed decisions. Our Planner will also listen to your concerns and revise the recommendations as appropriate.
- Implementing the Financial Planning and Investment recommendations - During this stage, we will help you carry out the recommendations or serve as your 'coach', coordinating the whole process with you and other professionals such as solicitors or stockbrokers.
- Monitoring the Financial Planning and Investment recommendations - This will be an ongoing process and our Planner will personally review your situation and adjust the recommendations, if needed, as your life changes.
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Financial Planning and Investment Process
Your Role in the Financial Planning and Investment Process
Financial planning is a process that requires effort and commitment from both the planning team and the client. Many people decide to hire a fee based financial planner without fully understanding their role in the financial planning and investmentprocess. To get the most out of this relationship, you must be ready to do your part, too.
- Be honest and forthcoming.
- Participate in the financial planning process.
- Seek clarity.
- Share your financial data and provide all relevant documents upon request.
- Attend all scheduled calls and meetings.
- Follow our advice to the best of your abilityeven if it requires personal sacrifice, changing your behavior or overcoming inner resistance.
- Make the decisions and take the actions necessary to achieve your goals.
- Keep us informed about important changes in your life.
- Allow your plan a reasonable amount of time to produce results.
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