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2. Gathering client data, including goals.

The financial planner should ask for information about your financial situation. You and the planner should mutually define your personal and financial goals, understand your time frame for results and discuss, if relevant, how you feel about risk. The financial planner should gather all the necessary documents before giving you the advice you need.

3. Analyzing and evaluating your financial status.

The financial planner should analyze your information to assess your current situation and determine what you must do to meet your goals. Depending on what services you have asked for, this could include analyzing your assets, liabilities and cash flow, current insurance coverage, investments or tax strategies.

4. Developing and presenting financial planning recommendations and/or alternatives.

The financial planner should offer financial planning recommendations that address your goals, based on the information you provide. The planner should go over the recommendations with you to help you understand them so that you can make informed decisions. The planner should also listen to your concerns and revise the recommendations as appropriate.

5. Implementing the financial planning recommendations.

You and the planner should agree on how the recommendations will be carried out. The planner may carry out the recommendations or serve as your “coach,” coordinating the whole process with you and other professionals such as attorneys or stockbrokers.

6. Monitoring the financial planning recommendations.

You and the planner should agree on who will monitor your progress towards your goals. If the planner is in charge of the process, she should report to you periodically to review your situation and adjust the recommendations, if needed, as your life changes.

In the Philippines, the leading organization for Financial Planner certification is probably the Registered Financial Planner Institute, a local chapter from Ohio, U.S.A. There are about  400+ individuals who have taken the program since its inception in 2005 in the Philippines. The program boasts of several comprehensive programs on Financial Planning, Investment Planning, Insurance Planning, Estate Planning and more. The local chapter also boasts of several well respected and credentialed moderators who are University Professors, Columnists, Best-Selling Authors, Corporate Executives, etc.

It is always best to check out your financial planner. Is he credible? Does he have the credentials? Does he have the necessary experience? And more importantly, does he have the right character as trust is the most important foundation in a planner-client relationship.

Be careful in choosing a financial planner but don’t dilly-dally in getting one, it really is a wise decision to make.

“The wisdom of the prudent is to give thought to their ways, but the folly of fools is deception.” – Proverbs 14:8, NIV

The term ‘Financial Planner’ has been a buzz for quite some time now. It makes sense to have a doctor for our medical needs, architects & engineers for our building needs, computer engineers for Information Technology needs – why not a Financial Planner for our personal finance needs?

The benefits of having a Financial Planner makes it a great idea. A Financial Planner’s best trait is that he sees the ‘big picture’ of your financial life and will be more objective and more deliberate in helping you achieve your financial goals.

However, just like in any profession, not everyone deserves to be called a ‘professional’.  In the absence of any local regulation or guidelines, anyone can call himself a ‘Financial Planner’ without having the necessary training, education or certification. Worse, there are self-serving companies that certify their own people as financial planners. There are so many individuals who decided to start putting the term ‘Financial Planner’ in their business cards and the public got more confused as to who is a financial planner and what a financial planner really does. Agents of financial services products started to ride on the wave of financial planning, calling themselves financial planners and yet their only objective is to sell their products. There’s nothing wrong with selling financial products, it is a very noble profession but my beef is when the public is being mislead just so that one can make a sale.

Further, a fancy designation, though helpful, is not a guarantee that a person is a real financial planner. The acid test of a financial planner is if he subscribes to an accepted financial planning process and willing to put his program on paper, also referred to as a financial plan. A good gauge to discern a real financial planner is if he subscribes to the internationally accepted 6 Step Financial Planning Process (by the Certified Financial Planner Board of Standards):

From http://www.cfp.net/

1. Establishing and defining the client-planner relationship.

The financial planner should clearly explain or document the services to be provided to you and define both his and your responsibilities. The planner should explain fully how he will be paid and by whom. You and the planner should agree on how long the professional relationship should last and on how decisions will be made.

… to be continued.