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It’s been said that failing to plan is planning to fail, and that is certainly true when it comes to money matters. Financial planning is important, but there’s so much conflicting information that it can be hard to determine the best course of action — especially if you try to go it alone. With that in mind, meeting with a certified financial planner — someone who can analyze your financial position, create a solution to address your personal needs and get you on the road to financial health — is a must.

To help you understand what to expect before and during the financial planning process, we spoke to Emily Dafferner and Reid Wesson, two CFP® (Certified Financial Planner)-certified professionals with Reliant Investment Management. Here, they share the six steps that will put you firmly on the path to financial security.

1. Find a financial planner you can trust, and establish the terms of the relationship.

By it’s nature, financial planning reveals some pretty intimate details about your money life, so it’s important to find a financial advisor you can trust. You’ll want someone who has the proper credentials, of course, but you’ll also want someone who is approachable so you’re not afraid to ask straightforward questions from the get-go. “It needs to be a good fit for both parties,” says Emily.

To start, you should definitely ask whether the planner is a fiduciary — meaning they are ethically and legally required to act in your best interest at all times when giving you advice. A planner who has the CFP® certification or CFA (Chartered Financial Analyst) will meet this requirement, but this isn’t the case for all financial advisors, so do your homework.

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You should also get clear on your financial needs and goals before you even walk in the door to meet with a potential advisor. When you’ve done this, you can more easily assess whether the advisor is interested in your specific situation or simply providing the same standard recommendations that he or she would for any other client. Don’t be afraid to ask for details on how the financial advisor serves each client and decide whether those processes are something you can agree to.

When you’ve found the financial advisor you want to work with and are ready to move forward, be sure to ask how long the relationship will last and who will handle the different responsibilities related to the planning process. The advisor should also share any conflicts of interest and reiterate the compensation structure.

financial planning

Life is filled with unexpected twists and turns, but taking the time for thorough financial planning can help you stay on your feet through all of them.

2. Gather all of your financial information.

Once you’ve made things official with your new advisor, it’s time to take a deep financial dive. Think of this step as baring it all — it’s a chance to share the specifics of your current financial situation, as well as your future goals. Your first meeting may be a bit awkward — talking about money with a stranger is difficult for anyone — but it’s an essential step of the financial planning process. And being forthright will pay off in the long run.

Your financial advisor may ask for bank statements, retirement plan documents, your mortgage balance and more. The onslaught of paperwork may feel overwhelming or stressful, but it is a critical step. “Your financial plan will only be as good as the information you decide to share,” says Reid.

3. Get clear on your current financial status.

At this point, your advisor will take a closer look at all the details you have shared and conduct a S.W.O.T. analysis, identifying the Strengths, Weaknesses, Opportunities, and Threats in your financial portfolio. This will help to determine how your current financial position aligns with your goals. This step may also unveil your financial weaknesses or any poor financial decisions you’ve made in the past. More importantly, though, this step offers clarity for you and your advisor on how to best move forward. “No one likes cleaning out their closet,” Reid says, “but once you see what you need to do to tackle it, you will feel a lot better.”

4. Determine next steps.

After your advisor’s in-depth look, he or she will be properly equipped to make some suggestions regarding your next steps. This may include different options for how to attain your goals, as well as insights into how each approach may differ. Your advisor should also help you decide which goals are most important to tackle first. For example, you may want to pay off your credit card debt and mortgage while also saving for retirement and your child’s education. Unfortunately, it may be difficult to do all these at once. “In many cases, all your goals may be possible, but you may have to make some trade-offs, like changing your original timelines,” says Emily.

financial planning

A good financial advisor will help you assess your current financial state while also giving you the tools to reach future goals.

5. Collaborate on the plan.

You and your advisor should review your new financial plan together, and you should both agree on the next steps. But having a concrete plan isn’t the last step of the process — actually, the opposite is true. You’ll also need to agree on what each of you will be doing to make those plans a reality, and you’ll need to set realistic deadlines for each task.

“Financial planning is not a passive process for the client, and the advisor shouldn’t act like a dictator,” Emily says. “The process is a collaboration of advisor and client. It’s a team approach.”

6. Keep your eye on the prize.

As major life changes happen — like getting married or divorced, having children or receiving an inheritance — you’ll need to have another conversation with your advisor and adjust your plan. These life changes may set you back or move you forward, and your game plan needs to shift accordingly. “Your financial plan isn’t meant to be a rigid, concrete, unchanging document,” says Reid. “It’s fluid and adaptable. As your life changes, expect your plan to change too.”

You’ll also need to keep your eye on the prize and stay of abreast of your financial situation as it evolves over the years. Otherwise, you run the risk of getting off track or stalling your progress. After all, you wouldn’t buy a home and never do any maintenance. “By ignoring your money, you may wander down a slow road of compromise,” adds Emily.

It’s normal to feel worried, scared or even defeated by many of life’s big financial challenges and decisions. And if trying to master your money on your own becomes too much of a burden, it may be time to chat with a financial advisor. You’ll rest easier knowing that you have a trustworthy professional — and a sound plan of action — to help move you in the right financial direction.

Thanks to Emily and Reid from Reliant Investment Management for sharing this wonderful advice! 


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