How the Financial Planning Delivery Proceeding ?

How the Financial Planning Delivery Proceeding ?


Whether you are going to the doctor or taking self remedy, but the Financial Planning is so more important today. Rich Dad Poor Dad - Robert Kiyosaki tells, ' It's not how much money you make, but how much money you keep, how hard it works for you, and finally how many generations you keep for it '. So, Earning high is not a thing to build your wealth, but the proper planning on your money - The Financial Planning.

The Financial Planning Delivery proceeds itself by two ways. The First way is the hard one, that you can do as a self process. By attaining knowledge on Financial Planning, so that you can make this process step by step - Remember, it's not a easy task, you have to be work hard on retrieving data (Inflation rate, Retirement Corpus, Rate of Returns, CAGR / XIRR).

Second way is the easiest one, you can choose a Financial Advisor or Investment Advisor, he would help on your account. The Financial advisor who is a professional, helps you on personal finance based on your current Financial situation. There is a Six (6) step process used by the Well written Financial Advisor,

  • Establish and define the Client-Financial Planner relationship

  • Gathering Client data, including their goals

  • Analyze and Evaluate the financial status

  • Develop and Present planning recommendations

  • Ask to Implementing the financial planning Recommendations

  • Review the Planning recommendations.


There is an agreement between the client or customer and the Financial advisor (Planner), what the service to be render. For that the financial advisor would charge a fee (in small) and the agreement abide by both persons (Client - Planner Relationship).

The First and Foremost task is understanding the Client's Financial Situation while going to prepare for Financial Planning. Finding the Client's current income and future needs and wants. Needs are the mandatory expenses like House Rent, Electricity, Food, transportation, etc. Wants are the personal desire like Marriage, Foreign Trip, Buying a car.

Current Income should be used to meet the current expenses and also support the future expenses. Identifying the surplus on income, so that one can save and invest for the upcoming expenses. It would also helpful for Wealth Creation. Assets and Liabilities numbers should be clearly examined. Income, Expenses, Assets and Liabilities are the four elements were in a table.

Wants are used to identifying the Client's Financial Goals. For full-filling the financial goals, the amount of money required, that will be derived from Savings and Investing. Financial Goal(s) must be come with two elements - The Value and time for the Goal. For example,  Mr. X needs the amount of Rs. 10 Lakhs after 5 years for his daughter's higher education. Daughter's higher education is the Financial Goal, the amount of 10 lakhs required is a Value and 5 Years duration is a time to the Goal of Mr. X.

Prepare for the Risk Profiling is an essential task for the Client. The Financial advisor should consider the recommendations on Investing, based on Client's Risk Profile. It can be rend into two things - Risk Capacity and Risk Attitude.

Risk Capacity is nothing but, the client's ability to take risk. Generally, a high risk leads to high reward, on the other side - it depends on client's ability. Risk Attitude is the way, the willingness to take Risk. It depends on Client's personal mentality. Risk Profiling can be measured by collecting information through Questionnaires. On submission of Questionnaire by the client will help the advisors to plan accordingly.

After execution of Financial Planning recommendations for the Client, then it should be reviewed regularly in an interval. So, that a change may need on Client's financial situation over the period of time. By reviewing once a year, is a healthy one for the Client's Financial Planning delivery process.
A Goal without a Plan is, just a wish...

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