What are the 6 Steps of Financial Planning?

At the beginning of any financial planning process, it is essential to gain an understanding of your current financial situation – establishing both where you are now and where you would like to be in the future.

To establish this, financial planners like Hansford Bell might ask questions related to health, family relationships, earning potential, risk tolerance, or financial needs and priorities. Other questions might be more qualitative in nature, relating to income, cash flow, savings, assets, and tax.

This stage offers you the opportunity to give planners a clearer look into what you wish to gain from your financial planning – for example, if you want to retire abroad, this is when you should express your intentions.

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2.Identify and Curate Your Goals

Once the broader picture has been painted, step two allows you to set more detailed goals. Here, a financial planner can use their expertise to help you select specific financial targets. In doing so, they may ask questions that give them richer details about your financial wishes. For example, a planner may seek to establish a time scale – whether you would like to achieve these goals in 10 years, 20 years, 30 years, or more.

It is also likely that risk tolerance will be re-centred here to establish safe and responsible goals specific for the client.

3.Analyse Your Current Financial Activities

Once information about plans for the future has been established, you can then reassess what steps you’re currently taking to improve your finances. This will include developing a clear understanding of current income, expenses, assets, debts, investments and other financial commitments.
This stage seeks to understand whether you are on track to achieve your loosely selected goals or whether adjustments to spending habits or other financial factors are necessary. In recommending changes, a financial advisor can offer you an informed perspective on the choices, outlining the advantages and disadvantages of any prospective course of action.

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4.Develop a Comprehensive Financial Plan

Based on the information gathered in the previous step, a financial planner can now make recommendations to help you reach your financial goals. This will formulate a plan that both you and your financial planner can review together.
Your financial plan can cover a wide range of both short-term and long-term goals and objectives. In addition to outlining goals, it may outline a number of strategies that the planner believes will facilitate the reaching of these goals.
A detailed strategy and timeline for any investing funds will often be central to your plan, in addition to any required plans for debt management or retirement. At Hansford Bell, our financial planners are committed to prioritising the best interests of every customer, and we will endeavour to provide tailored plans and support that extensively reflect your financial wishes.
Once a plan has been created, the plan must be frequently reviewed and (if necessary) modified to account for any changes to circumstances or targets.

Looking at your finances as a whole can create the best results – find out about our financial life plans >

5.Put Your Financial Plan into Action

With your financial plans clearly set, you can now start making the appropriate changes and moving towards your financial goals. This might involve setting a clear budget, being diligent about tracking expenses, or monitoring the day-to-day and month-to-month flow of your finances.

When you move into this stage of the financial planning process, it is important to frequently re-assess your goals to make any relevant changes and sustain momentum towards your goals. Many financial planners also recommend noting and celebrating milestones towards targets. By being proactive in the pursuit of your goals, you pave the path to financial success and eventual fulfilment of your wishes.

Working with a financial planner can be the best way to make a plan and act on it. Contact us today for a free consultation of your needs!

6. Monitor Your Progress and Make Adjustments

As with all plans, financial plans can grow and change over time. Once a plan has been created and implemented, it is important to review it in accordance with any changes in life circumstances such as getting married, having children, changing career, or losing a family member.

Often, changing circumstances require new perspectives or approaches to financial planning. In addition to changes such as these, external changes such as changes in tax laws, interest rates, inflation, stock market fluctuations, and economic recessions may also result in a need to modify financial plans.

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To adapt to these changes quickly and effectively, it is best to work with a trusted financial planning partner.

Tailor Your Financial Plan with Hansford Bell

Making the best financial plan means understanding the complex processes involved and the right methods to achieve your targets – but it also needs an understanding of you, your goals, and your circumstances.

At Hansford Bell, we provide financial advice with a personal approach.. We take the time to get to know you and understand what your financial needs are – supplying the necessary support to help them achieve these goals.

Get in touch today to start building a financial life plan that can help you to achieve all your goals, or read on with some related articles to explore our full offering.

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