Comprehensive financial planning involves a detailed view of your financial situation. It is the act of planning and addressing your economic events. To determine your actual financial condition, a financial planner does a comprehensive analysis.
Comprehensive financial planning addresses investment management, estate planning, and retirement planning. It also addresses potential economic events that may alter your long-term financial security. A certified financial planner develops a plan that helps achieve your financial goals.
The plan provides direction and strategy to better your financial situation over time. Here are the components of a comprehensive financial plan.
Define your Financial Objectives
The first step when developing a financial plan is to define your financial goals. A financial planner starts by getting a clear understanding of your financial situation. The financial planner asks about
• Retirement planning
• Tax minimization
• Protection of assets and income
• Estate planning
• Education plan
• Debt structure
These objectives determine the strategies required to create a vision statement.
Align Your Assets
The financial advisor asks the client to provide their financial statements. Advisors add the statements in a financial planning program to generate financial reports. It would help if you also analyzed different scenarios that may alter your financial plan.
Some of the scenarios are
• How will paying for your children’s education affect your retirement plan?
• What would happen if one of us suffers from a long-term disease?
• Should we pay for life insurance, or is there a better use of the assets?
• Should we invest more in your 401k than other investments?
Having analyzed the financial situation and financial objectives, develop an investing strategy. The financial advisor reviews your asset allocation and monitors the investments. The advisor suggests new approaches where appropriate and provides quarterly performance reports.
The advisor implements and adjusts the management plan according to plan.
Disasters happen all the time; we can’t prevent some things from happening. Risk management is a critical step, and it ensures that you are safe when disaster strikes. A good investment plan can become redundant unless you protect yourself from catastrophe.
A certified financial planner will ensure you insure in these areas
• Long-term care
If under-insured in any area, the planner can help you choose a good insurance policy.
Shielding your Interests
The idea of planning for your future won’t be logical if you don’t live your dream life. The financial management process makes sure your hard work is safe. To be safe, you have to protect these factors.
• From lawsuits
• Estate planning
• Identity theft
• Income tax planning
Long-term financial success requires customized planning and review from a certified financial planner. For comprehensive financial planning, contact us today!