The financial planning process

Financial Planning is an organised and structured process. If the process is strictly followed, the chances of meeting your objectives and achieving financial independence will be considerably improved.

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Stage 1: Understand your financial goals

The starting point is to identify your goals and objectives. We do this by asking the ‘soft questions’ which really get you thinking about where you what to be financially.
We discuss with you what aspirations and intentions you have, what concerns you have and how important each of these are. Furthermore, we discuss your attitude to investment and other risks which is especially important, as it will be critical to investment portfolio construction, a key aspect of your Personal Financial Plan.
Finally, it is crucial to understand how each of these issues makes you feel, so that we can help you prioritise. Financial planning is not about selling products. It is about developing a financial game plan.

Stage 2: Collect all your important information

We need to collect factual information. It is crucial to understand your personal circumstances, current financial situation and how you have arrived there. The more detail the better, because the clearer this picture of you and your finances is, the clearer the starting point of our journey. The best advice cannot be given in isolation.
We do this by completing our Financial Review document. We will consider your family, your income and expenditure, your employment status, your tax position and your existing financial products so that we can appraise the appropriateness of them in relation to your financial plan.
It is important to work out your disposable income (net monthly income minus monthly expenditure). We do this using budget planning techniques.

Stage 3: Analyse your current situation

The third stage is to for us to analyse your current financial position, and to fully review your existing policies (be them Pensions, ISAs, Bonds, Endowments, Protection policies, Mortgages etc). We will request information from any relevant life insurance, pension or investment providers using an authorisation letter.
We consider your goals and objectives identified in stage 1, to determine the 'gap' between the goal and the reality.
This 'Gap Analysis' will enable us to clearly understand the journey you will need to travel in order to achieve your goals and we can present this for you in stage 4.

Stage 4: Create your financial plan

Stage four involves the creation of a roadmap or journey plan, which communicates the most efficient route from A to B. This roadmap is your Personal Financial Plan. It will analyse your financial arrangements and make recommendations as to how your existing finances can be utilised. This will cover your assets, investments, liabilities and income.
The way in which you spend your money is also a vital aspect of the analysis. Therefore, a review of your expenditure, in both the short-term and over the long-term will help to establish how robust the overall financial plan is.
The plan will identify the cost of achieving your objectives, your financial independence and plan for any disasters which may arise. Your Financial Plan can be multi-generational and can cover the effective and efficient distribution of assets on death, in accordance with your wishes.
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Stage 5: Implement your plan

The fifth stage of the process is to implement the plan. This stage includes an action plan which will be provided once we have both agreed the plan. It could include amalgamating some or all of your existing investments, cancelling unsuitable policies and would list all recommendations.
Without the implementation stage, the rest of the planning process can be worthless.

Stage 6: Review how the plan is working for you

The final stage is to regularly review the plan and make modifications where required.
Reviews normally occur on an annual basis, but Wealth Matters provides a minimum of 12 points of contact per annum, the form of 4 company emails, 4 company newsletters, and 4 investment bulletins. The overall aim of the financial planning process is to help you reach your financial goals and develop or maintain your desired lifestyle, in the most efficient way possible.