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Step 3 in the Financial Planning Process: Analyzing and Evaluating your Financial Status #FinancialPlanning

By July 24, 2012October 4th, 2016No Comments

The third step in the financial planning process is analyzing and evaluating your financial status.  Your planner should analyze the information you give hee to assess your current situation and determine what you must do to meet your goals.  At this stage of the process, she will take all of the info you have provided and sift through it to start developing a plan for you.

Depending on what services you have asked for, your planner may analyze your assets, liabilities, cash flow, education funding, insurance coverage, investments, tax strategies, retirement plan, estate plan, and anything else relevant.  While these things that I have mentioned are fairly standard, there is no pre-set formula in the industry for what planners will analyze.  Most planners will evaluate and help you plan for as much or as little as you would like.

While you and your planner are discussing which areas she will guide you, she should let you know in advance if she is deficient in any area.  For instance, if she doesn’t know much about property and casualty insurance (and many planners don’t), she should tell you that up front.  If you do not need advice in that area, that shortcoming shouldn’t concern you.  If for some reason you need expert property and casualty insurance advice, you should look for another planner, or more likely, get specific help in that area from someone else.

Don’t assume that what you are looking for is too technical or specific.  You would be surprised by the disparate specialties practiced by financial planners.

This does not mean that you can expect your planner to know, off the top of her head, the answer to every question you pose to her.  People ask us all sorts of questions, and it would be impossible to know the answers to them all.

I would be concerned if your prospective planner does not know the context in which to find your answer, dismisses it outright, or responds with an evasive, generic, non-answer that turns into some sort of sales pitch.  Almost all of the practitioners in this industry have had to sell their services for a living, much more so than most members of more established professions.  Remember that.

Michael Garry Yardley Wealth Management

Author Michael Garry Yardley Wealth Management

Michael Garry is a CERTIFIED FINANCIAL PLANNER™ practitioner and a NAPFA-registered Financial Advisor. He is a member of the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association (FPA).

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