What Role Does a Certified Financial Advisor Play in Successful Financial Planning?
Financial planning is not going to provide desired results if all relevant aspects are not considered. This is where utilizing services of an experienced and certified financial advisor becomes important since the advisor can check all the details and suggest the most feasible strategy that will be useful for you. Such details would consist of estate planning, financial management, retirement planning, asset management, and tax planning.
In the following sections let us go through details of the process you need to follow for financial planning so that expected investment goals can be achieved.
The Process of Financial Planning
Engagement and Letter of Understanding
In this first step of the process, a certified financial advisor will be developing the scope of work related to financial planning that is to be performed.
Your financial advisor will also develop a letter of understanding that will provide details of:
- The total duration for which services of the financial advisor will be required.
- The task advisor will be performing.
- Compensation that you will is offering to your advisor.
- Details of how any conflict of interest will be resolved.
In this second step, your financial advisor will be working to collect information which will assist the advisor clearly comprehend your needs and develop an investment strategy that will be appropriate for you. Few of the details which will be collected would include information about your financial objectives, investment horizon, and similar other details.
Analysis of Financial Data
The main task in the third step would be an analysis of financial data so that it becomes easier to understand your financial position. Such analysis will also help your certified financial advisor know more about financial goals that are to be achieved. The analysis of financial details will help your advisor decide whether financial goals you have set can be achieved.
Creation of Investment Strategies
Here, your certified financial advisor will focus on identification of investment strategies which will help in successful implementation of your goals.
After finalizing all the strategies, your advisor will present them to you as recommendations. In addition, all the strategies will be explained to make sure that you develop clear understanding of the same before the strategies are actually implemented.
Implementation of Plans
The fifth step would consist of development of consensus after all the objectives have been developed. In addition to reaching a consensus, another thing that will be done at this point will be the development of a time frame so that all the tasks can be performed in a timely fashion.
The Final Review
The last thing to do in this financial planning process will be a proper review of the plans to be sure all the relevant aspects have been covered. Additionally, a time frame will also be set for a re-evaluation of the work process to make sure that all the tasks are being carried out as planned.
To conclude it can be said that a certified financial advisor plays a crucial role in the financial planning process and ensures that all planned objectives are achieved.