SUCCEEDING AS A FINANCIAL PLANNER | THE 7 STEPS OF FINANCIAL PLANNING PROCESS

IMPORTANCE OF FINANCIAL PLANNING

Financial planning is an essential element of the whole process of financial management that one cannot do without if you really want to make a in your quest to achieving financial freedom. It is the foundation upon which every other building of financial empire is built.

THINGS TO CONSIDER AS A FINANCIAL PLANNER

YOUR SKILLS AND EXPERTISE: of course, you need to have the right mix of qualification and experience to be able to render any form of financial service. If it is inappropriate for a civil engineer to perform surgery on a patient, what then do people of no financial training whatsoever is doing in the financial service industry as financial planners? So do yourself a favour and do the right things first.

TAXATION: the tax landscape of a country is an important variable that needs to be seriously considered while performing your duty as a financial planner. Huge profit can easily be turned into losses if the tax implication of a plan is not seriously considered.

HEALTH: the health of a prospective client is an important factor that you must have at the back of your mind. A lot of finance professionals may question this point but consider a situation whereby a client that is hypertensive is advised to enter into a volatile investment vehicle. The investment opportunity might be nice but could adversely affect the health condition of a client if care is not taken.

CURRENT AND ANTICIPATED STATE OF GLOBAL ECONOMY: you need to be abreast with the economic indicators (both current and potentials). You do not need to be part of the policy making team before you can read the economic hand-writing necessary to be a highly sought after financial planner.

CURRENT EARNINGS/ LIFE STYLE: if there is any skill that you must not do without as a finance consultant, it is your ability to seek information about your clients’ current earnings and lifestyle. This information will help you determine the level of risk that a client can tolerate.

SEVEN SIMPLE STEPS TO FINANCIAL PLANNING TO MAKE YOUR CLIENTS HAPPY

1. Build a solidly defined client-customer rapport: the first step to becoming that financial planner that you been dreaming of is to establish a solid yet not so discomforting relationship with your client. You stand to gain the honesty of the prospective client if you can create a first impression that impresses. Remember, there is no second chance to create a first impression. What worked in a situation might not in another, but, what I do is to politely introduce my company, what we do and how we do it. Then, I can try to discuss prevailing situation with the client to just to create a bond that would hold us close when the business reality starts setting in- it surely will happen.
2. Discuss the terms of your service(s): after creating a serene environment, it will then be ripe and promising for you to discuss the terms of your services. Make sure you clearly draw a line that cannot be argued by anyone between services that you intend to render to the clients. It is often too easy for clients to mix financial services and legal services. Even though you as a financial adviser is required to know the legal implications of whatever suggestions you give to your client, always make it clear that the opinion of a legal counsel be sought before embarking on any investment that has significant degree of legal risk or implication. It is way too easy for finance professionals to get carried away while marketing financial products to clients and in the process fail to do what needs to be done.
3. Collect data from your client for analysis: here, you as a financial planner need to collect all information that you consider necessary for a successful financial product development exercise. Care needs to be taken here so as not to ask for too much information as this will keep the client on their toes- especially at this time of identity theft.
4. Perform background check on your client: with the information you have gathered, perform the basic background check. Apart from the obvious reason of compliance, you are carrying out a background check so that you can have enough information to guide you financial development process.
5. Design suitable financial product(s) that suits your client: now, go ahead and design a suitable financial product for your client taking into consideration all that you have collected in the form of information. Avoid the common mistake that is made by many financial planners- do not dole out a single set of financial recommendation to all your clients. People love to be treated as individuals and would be ready to pay premium for it.
6. Assist your client in using the financial product: it is not just enough to put down your recommendations in fine print and then leave your clients to struggle with the implementation aspects of it. You need to be handy for further guidance. Also, due to the fact that there are implementation problems that may arise in the course of executing your recommendation, you need to make sure that machineries are put in place to handle unforeseen problems when they arise.
7. Monitor and get feedback: no system will be complete if it is not closely monitored through a process of feedback. As a financial consultant, you need to build a feedback mechanism around your financial products and recommendations.

We have discussed two important aspects of financial planning that all financial planners should know. Firstly, financial planning factors to consider before venturing into any form of financial mentorship were discussed. It will be better for you to forget getting started than to forget those basics. Secondly, time tested steps of financial planning process was discussed in a simple language.

It is now up to you to implement all that you have read in this blog post as these tips as sound as they might be will not work if a sort of action is not taken by you. Remember that you cannot succeed if you never tried.