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What is Financial Planning?

Financial planning is the analysis of your entire financial picture, and proper advice on how to achieve your short and long term financial goals.

From saving for education and planning for retirement, to managing taxes and insurance, financial planners develop valuable relationships with clients to provide them with confidence today and a more secure tomorrow.

Planning components

The Six Key Components of Financial Planning

  1. Financial management 

    • Mastering financial, economic and cash flow/ debt management concepts.​

  2. Investment planning

    • Building a portfolio, including different investment vehicles, diversification and risk management.​

  3. Tax & savings planning

    • Ensure that all aspects of your planning work together to reduce your overall tax bill, and create a savings plan to comply with tax legislation and minimize your own personal taxes

  4. Retirement income / retirement decumulation planning

    • Performing retirement needs analyses, evaluating retirement income plans, and understanding the integration and timing of pensions and assets at re​tirement.

  5. Insurance and risk management

    • Evaluation of risk and assessing different types of insurance, from life to disability to health.​

  6. Estate planning

    • The preparation of tasks and/or documents that serve to manage your financial picture in the event of your death or incapacity.​

Not all of these items may be pertinent or as important to you, depending on the phase of life you find yourself in.  However, they are all interconnected, and do need to be considered with respect to each other.

Financial planning is integrated financial management.


The Six-Step Financial Planning Process

Six step planning process

Working with a professional

Determine the scope of how you will work with your financial professional.  A formal engagement letter outlines responsibilities and timeilnes.

Develop the strategy

Your CFP provides a clear, written strategy with recommendations based on your situation and objectives, structured without emphasis on product purchases.

Identify goals and objectives

Determine your financial goals, your personal goals, your needs and priorities.  This helps your CFP recommend the most suitable strategies for your unique situation.

Implement strategies

Implement your strategy with agreed actions, responsibilties and time frames.   A financial plan is only helpful if the recommendations are put into action.

Analyze your current situation

Collect and analyze your  financial data including income information, investment statements, tax returns and life insurance.  Identify areas that create barriers to your objectives.

Monitor and review

Periodic reviews (at least annually) and revisions of your plan helps to ensure your goals are achieved, and ensures that you remain on track as your life changes.

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