The Financial Planning Process and Why You may Need it

By: Max ValaVanis, CFP®

I’m currently going through the dreadful process of painting the interior of my house, and the multitude of greens on the color pallet astounds me. When I proudly walked into Sherman-Williams, I was under the impression that I could effortlessly select a shade of green and leave the store with the utmost confidence that my color was the best for me. Unfortunately, I sadly admit that this was not the case and that there is a comprehensive and ongoing process to choosing my perfect color.

When selecting a financial advisor, the same is true. Financial Planning is not a simple process that can be solved in an hour-long meeting, but a long and comprehensive journey that lasts as long as the professional relationship does. Accordingly, the CFP® Board has developed a 7-step process to best serve clients like you. As CERTIFIED FINANCIAL PLANNER™ practitioners, we at ValaVanis Financial must adhere to this complete 7-step process when involved in a Financial Planning relationship.

The genesis of the process is understanding a client’s financial circumstances. Just like I wouldn’t march into Sherman-Williams looking for my shade of green before stepping foot into my house, you shouldn’t receive financial advice without an advisor understanding your situation! Afterward, the client and advisor should identify the goals of the relationship. These initial two pillars of the financial process should be completed in the first meeting. Why leave the meeting without receiving financial advice? The Financial Advisor must thoroughly complete the following two steps of the process, which often takes time. The advisor initially analyzes the information and data and then develops financial planning recommendations.

After the CERTIFIED FINANCIAL PLANNER™ practitioner completes these two steps with a fine-tooth comb, the client will be greeted with their financial plan. In this meeting, the advisor presents their recommendations and explains how they were able to determine these recommendations. The client then decides if they agree with the plan and recommendations. If both parties believe the relationship is harmonious, the implementation phase begins.

As time passes, one of the most critical steps in the financial process becomes ever-present, the monitoring stage. Once the financial recommendations are implemented, the advisor’s job has just begun. They must actively review and update their recommendations when necessary. Usually, this entails – at a minimum – annual meetings and collective adjustments from both the advisor and client.

Similar to painting the walls in your house, taking time and having patience may be the difference between a successful and poor financial plan. Using a CERTIFIED FINANCIAL PLANNER™ practitioner could benefit your financial health. Whether you are planning for retirement, higher education, or simply leaving a legacy to your heirs, CFP® practitioners can utilize the financial planning process to map out a plan for you. If you are interested in learning more about the financial planning process and how it may help you, give our office a call.

Max ValaVanis, CFP® is a co-owner of Valavanis Financial in downtown Melbourne and in Rockledge. Max specializes in lifetime income planning for Retirees while protecting principal. Max can be reached at 321-956-7072.