If you’re interested in working with a financial advisor to develop a financial strategy, you may be wondering what the process involves. Typically, good financial planning includes the following steps:
· Goal setting. Your financial advisor will ask you questions to help you identify your financial needs and dreams for the future. For example:
- When you envision your future, what’s next for you?
- Where do you see yourself living?
- What lifestyle goals are important to you?
- Do you want to help provide for your children’s education?
- How do you envision your retirement?
- Do you want help to reduce the effect of taxes on your assets?
· Fact-finding. After identifying your goals, you’ll need to assess your current financial situation. This involves gathering financial documents and account statements to determine where you stand. Your financial advisor can help you sift through this information to create a clear picture of where you stand.
· Plan creation. After reviewing your financial documents, your financial advisor will work with you to establish a course of action to help you get from where you are to where you want to go. Your financial strategy may cover some or all of the following information, depending on your situation:
- Your needs, goals and values
- Current assets and liabilities
- Investment portfolio recommendations
- Retirement plan
- Insurance audit and needs analysis
- Estate planning analysis
- Product recommendations and action items
· Strategy implementation. After reviewing your strategy and consulting with your financial, tax and legal professionals on any necessary details, you’ll work with your financial advisor to implement it. This may include:
- Establishing a regular savings program
- Adjusting insurance coverage to meet current needs
- Purchasing appropriate investment products
- Repositioning assets
- Setting up tax-efficient ways to transfer wealth
· Regular reviews. After implementing your strategy, you should plan to meet regularly with your financial advisor to review your portfolio and ensure that it is up to date. Also, be sure to contact your financial advisor when you experience a life-changing event, such as a marriage, birth, death, disability or divorce, to ensure that your strategy and beneficiary designations are updated to reflect your wishes.