Financial Planning is the process of evaluating and managing the utilization of financial resources optimally for the achievement of an organization’s goals and objectives. Financial planning helps insulating businesses from myopic policies and practices, and aids in mapping out its financial future. Financial planning is one of the sought after financial courses for working professionals owing to the rapidly growing need for trustworthy and knowledgeable personnel.


Whether your finance personnel do it or a Certified Financial Planner does it, the financial planning process should be done using the following six stages:


Establish goals and define client-planner relationship: The first step to financial planning is establishing goals and defining the client-planner relationship. This lays the foundation for the financial planning process and provides clarity about the client’s financial destination. To this end, the planner should ask open-ended questions about needs, goals, dreams, objectives, risk-appetite, past experience, financial strengths and weaknesses, etc. The financial planner defines her role, responsibilities and services to the client as well as the responsibilities of the client in this process. Once an agreement is reached about goals and relationship, the process moves ahead.


Gather relevant data: For formulating a sound financial plan, relevant data about financial information about the client the collection of necessary documents and structured questioning. All the information should be documented in order to visualize data and provide prudent recommendations.


Analyze and evaluate data: The financial and other data gathered about the client is analyzed and evaluated by the financial planner to get an in-depth understanding of the client’s situation with respect to her needs, goals and objectives, and determine the gap between the two and the path that must be followed. Based on the services requested, the assessments and analysis will be customized.


Develop the financial plan with recommendations and alternatives: Based on the analysis and evaluation of the customer data and needs, the financial planner develops alternatives and recommendations to meet goals and objectives and presents them to the client. Client feedback is taken and reviewed. Concerns are addressed, and the plan is revised to the client’s satisfaction. The financial plan is developed by incorporating relevant recommendations and revisions.


Implement the plan: This is the most challenging step because strong and sophisticated plans can be developed and revised but it is still a document, on paper. It requires immense focus and discipline to implement the plans and stay with it.


Monitor the progress of the plan: Plans need to be dynamic and must evolve with the need of the hour. So, monitoring and reviewing the progress of the plan regularly and systematically is an important step in the financial planning process.


To equip yourself with the skills and knowledge required in financial planning and management, you should consider enrolling yourself in finance courses.


Want to know how can this course help in your profile?