What Financial Advisors Do
Advisor Today (06/01) Vol. 96, No. 6 p.14; Weikart, Richard J.

Financial planning should be an in-depth process that begins with establishing a working relationship with the client, argues Richard J. Weikart of LUTC. The CFP Board's six-step process for financial advising begins with the establishment of a working relationship with the client. The advisor must explain all of the issues surrounding the planning process, the services he or she will provide, and what is expected of the client. The second step involves gathering data, identifying a client's goals and time horizons, as well as gaining an understanding of the client's tolerance for risk. In the third step, an advisor should analyze a client's current financial situation using cash flow projections, balance sheets, tax returns, existing insurance, employee benefits, investment summaries, and any other documents that might be available. In the fourth step, the advisor--having developed a program that meets a client's specific concerns--should make recommendations based on both values and risk tolerances. In the fifth step, the advisor must implement the program. The sixth and final step of the financial advising process involves a regular review of the program, ensuring that economic conditions favorably affect the target outcomes.


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