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You are the focus of the financial planning process. The results you get from working with a financial
planner are as much your responsibility as the planner's.
Financial planning uses a big-picture approach
Measurable financial goals should be set.
(Specific targets will help you achieve what you want when you want it. For example, you need to
quantify terms such as "comfortable retirement" or "good education for your children" so that you'll
know their real implications.)
All of your financial decisions are interrelated.
(Each financial decision you make may affect several other areas of your life. An investment decision
can have tax consequences harmful to estate plans; a decision about a child's education may affect
when and how you meet your retirement goals.)
Financial planning is an ongoing process that takes all your objectives into account.
Financial planning is a dynamic process. Your aims may change over the years due to changes in
your lifestyle or circumstances, such as a birth, an inheritance, marriage, house purchase or change
of job status. Revisit and revise your financial plan to reflect these changes so that you stay on track.
You must re-evaluate your financial situation periodically.
Your expectations must be realistic.
Financial planning is a common sense approach to managing your finances to reach your long-term
goals. It can't change your situation overnight. It is a lifelong process. Remember that factors beyond
your control, such as the stock market, inflation or interest rates, will affect your planning results.
Achieving your goals is the bottom line.
Investing in a plan is investing in your future. And a professional financial planner can help you
increase your chances of making that plan a reality.
Planners often come across clients who…
* Confuse financial planning with investing
* Neglect to set measurable financial goals
* Neglect to evaluate their financial plan periodically
* Think financial planning is the same as retirement planning
* Expect unrealistic returns on investments
* Don't understand how advisors are compensated
* Are looking for a quick financial fix instead of a long term strategy
* Don't understand that good professional planning advice is largely dependent on good
information from clients
* Believe financial planning is primarily tax planning
* Think they'll lose control over their decisions if they use a planner
When working with a financial planner, be sure you understand the process and what the planner
should be doing. Ask how the planner is being compensated. Provide the planner with all of the
relevant information on your financial situation. Ask about the recommendations offered to you and
play an active role in the decision-making.
Remember, you are in charge. | | |
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