The Financial Planning Process- An Overview
I owe a fiduciary duty to each of my clients as both a CPA and as a Certified Financial Planner™, and I consider the public's faith and trust in my professions to be both an honor and a privilege. Frawley Financial Services, CFP®, CPA, MBA, MSA, in Naples, FL offers a full range of financial planning and financial advising services, and expert CPA tax preparation. This includes, Income Tax Planning, Investment Planning, Retirement Planning, Estate Planning, Education Planning, and Insurance Planning.
THE FINANCIAL PLANNING PROCESS
Financial Planning is a dynamic, multifaceted process, which requires significant trust on behalf of the client, and expertise and superior interpersonal skills on behalf of the financial planner. The CFP® Board's Standards require that all CFP® professionals who provide financial planning services will be held to the duty of care of a fiduciary. I owe a fiduciary duty to each of my clients as both a CPA and as a Certified Financial Planner™, and I consider the public's faith and trust in my professions to be both an honor and a privilege.
The following is an overview of the financial planning process. Please do not feel the need to study this; I provide it here to help educate both my current and prospective clients as to what the financial planning process entails. Depending upon your particular needs, only some aspects of planning may apply. I will explain the financial planning process during our initial meeting, which may be either in person, in Naples, FL and the surrounding areas, on the phone, or via video chat. I have been serving nearly all of my clients remotely nationwide for years, through my secure MY VIRTUAL CPA®.
The Financial Planning process generally includes the following six steps, and are explained below in detail:
1- Establishing and Defining the Client-Planner Relationship.
2- Gathering Information Necessary to Fulfill the Engagement.
3- Analyzing and Evaluating the Client’s Current Financial Status.
4- Developing and Communicating the Recommendation(s).
5- Implementing the Recommendations.
6- Monitoring the Recommendation(s).
1. Establishing and Defining the Client-Planner Relationship. This includes identifying the client(s), discussing the financial planning process, explaining the scope of services offered, the services to be provided by the financial planner and our team of associates, determining the ability to meet the client’s needs and expectations, as well as identifying and resolving any apparent or potential conflicts of interest. Finally this includes defining and documenting the scope of the financial planning agreement in the engagement letter, including clarifying the responsibilities of both the financial planner and the client(s), the length of the agreement, how it may be terminated by either party, how the planner is compensated, and providing required client disclosures.
2. Gathering Information Necessary to Fulfill the Engagement. This includes interviewing the client(s) regarding financial resources and obligations with interviews and questionnaires, identifying the client’s personal values, goals, and helping them set realistic priorities. All information is kept strictly confidential, and will only ever be shared with other parties with your prior written as needed to complete the engagement, such as opening brokerage accounts, working with attorney(s), etc. This also includes collecting all relevant financial and other data, including detailed information of all assets and liabilities (including titling and duration) to create a Statement of Net Worth and Statement of Cash Flows, to assess your current financial position, and implications for Estate Planning. Other pertinent documents may include: Tax Returns, Investment Portfolios, Insurance Coverage, Employee Benefits and Retirement Plans, Wills, Trust Documents, and other legal documents (partnership and buy-sell agreements, etc), depending on the nature and scope of the agreement.
3. Analyzing and Evaluating the Client’s Current Financial Status. This begins with an analysis of assets, liabilities, cash flows, budgeting, and debt management. It also includes an evaluation of the following: risk management and insurance, tax, retirement, estate and education planning, as well as business ownership, entity type, and governing documents. In addition, any special considerations or concerns will be addressed across all areas of planning. This may include business succession planning, caring for a disabled dependent, or any area regarding special consideration.
4. Developing and Communicating the Recommendation(s). This involves creating appropriate client-specific recommendations to meet their goals and objectives, in line with the client’s values, risk tolerance, and time horizon. This is a synthesis of all findings within the constraints of their financial, and projected financial resources. It also includes reviewing the client’s goals, the assumptions made, the observations and findings, alternatives, and recommendations. Finally, this includes the risk of staying the current course, and not making any changes. This may be the appropriate recommendation if the client has done significant and appropriate prior planning, and is perhaps looking for a better fit with a CFP® and the continual monitoring of his or her plan.
5. Implementing the Recommendations. This step involves creating a prioritized implementation plan, including a specific implementation timeline. It also includes assigning responsibilities among the client, financial planner, and other professionals as necessary. This includes supporting the client directly or indirectly with the implementation of the recommendation(s), as well as sharing information, as authorized by the client in writing, with others, and determining monitoring responsibilities.
6. Monitoring the Recommendation(s). This includes discussing and evaluating changes in the client’s personal circumstances, reviewing the performance and progress of the plan, reviewing and assessing changes in the legal, tax, and economic environments, and making new recommendations as circumstances change. It also includes reviewing the scope of work, redefining the client-planner engagement as appropriate and updating the engagement letter, and providing the client with ongoing support. Please read my Financial Planning Philosophy- PLAN. ADAPT. RELAX.™
Certified Financial Planner™ services can be limited engagements for a particular aspect of planning, such as retirement planning, or it can encompass any of a multitude of related areas. During your free consultation, we will explore your expectations, goals and concerns, and mutually define the initial scope of the planning engagement necessary to meet your needs. I look forward to working with you!
Financial Planning is $250/hr with a minimum $500,000 investment, and 1.25% Assets Under Management (AUM) fee, which is negotiable with amounts starting over $1,000,000 AUM. For details, please see: RATES & QUALIFYING.