Establishing and defining the advisor-client relationship- The advisor explains and documents the services to be provided and defines his or her responsibilities along with the responsibilities of the client. The advisor explains how he or she will be paid and by whom. The advisor and client should agree on how investment decisions will be made and implemented.
Gather Client Data- The advisor will ask for all information about your financial situation and ask you to clearly define your personal and financial goals. Your risk tolerance and time horizon will also be discussed as well as reviewing all the necessary documents before giving you any advice. Family dynamics will also play a role in the data gathering process.
Analyzing and Evaluating your financial status- The advisor will analyze your information to assess your current situation and determine what you must do to meet your goals. Depending on the services required, this assessment could include analyzing the client’s assets, liabilities and cash flow, current insurance coverage, investments or tax strategies.
Developing and presenting financial planning recommendations- The advisor will offer financial planning recommendations that address your goals, based on the information you provide. The advisor will review the recommendations with you to help you make informed decisions. The advisor will listen to your concerns and revise the recommendations as appropriate. It will be made clear what steps the advisor will complete and follow up on as well as what steps the client needs to complete and follow up on.
Implementing the financial planning recommendations- The advisor and client will agree on how the recommendations are to be carried out. The advisor may coordinate the process with you the client to include other professionals such as attorneys or accountants.
Monitoring the financial planning recommendations- The advisor and client will agree on a schedule to monitor the progress of achieving your goals. This review will allow for communication of changes to your situation and adjustment to the recommendations.
