1. Establishing Financial Direction
Chapter 5
Establishing Financial Direction

2. The Process

3. The Client/Planner Worksheet
Helps the planner and client establish financial direction in a concise and systematic manner

4. Sample Client/Planner Worksheet

5. Step 1: Establish the Client-Planner Relationship
Establish relationship of trust and open communication with client
Discuss decision-making and length of relationship
The financial mission
A broad and enduring statement that identifies the client’s long-term purpose for creating a financial plan
Ensures understanding between the client and planner about why the plan is being created and implemented
Provides a basis for the generation of goals, objectives, strategies, and alternatives

6. Step 2: Gathering Client Data and Determining Client Goals and Expectations
Identify relevant environmental information
Establish financial goals
Develop financial objectives

7. Step 3: Determining the Client’s Financial Status
Insurance planning and employee benefits
Investment planning
Income tax planning
Retirement planning
Estate planning

8. Step 4: Develop and Communicate the Financial Plan

9. Select the Most Appropriate Strategy
A collaborative effort between planner and client
The planner
Ensures that the client understands all of the aspects of the alternative strategies
Educates the client on how to analyze the selection in a systematic and quantitative manner.
The client makes the final decision and is ultimately responsible for implementing the plan.

10. Step 5: Implement the Financial Plan
The planner can:
improve the probability of successful implementation by ensuring the client has a detailed understanding of the current strategy;
measure progress toward attainment of objectives; and
adjust the plan as necessary through periodic monitoring.

11. Step 6: Monitor the Financial Plan
Establishing targets and measures aid in monitoring the client’s progress toward attaining objectives.
A minimum of one target and one measure should be established for each objective.
Both the planner and the client should monitor targets and achievement.
Periodic monitoring of the plan is critical
It may be necessary to modify the plan