Jan 27 2009
Preparing FINANCIAL PLANNING REPORT. Understand Financial Planning Framework from Analysis and Objectives to Strategy.
Here are what a FINANCIAL PLANNING REPORT should cover:
1. Analysis – WHERE YOU ARE NOW
Where You Are Now
1. balance sheet
2. cash flow analysis
a) normal situation—current
b) normal situation—projected
c) death of “breadwinner”
d) disability of “breadwinner”
e) retirement
3. asset liquidity analysis
4. employee benefits
5. risk assessment
6. risk tolerance
2. Objectives – WHERE YOU WANT TO BE
Where You Want to Be
Quantification of goals
1. increasing investable income
2. improving liquidity
3. reducing risk
4. increasing income or meeting capital needs at death, disability, retirement, or for special situations
5. increasing financial security for heirs and satisfying charitable objectives
3. Strategy – HOW TO GET TO WHERE YOU WANT TO BE
How to Get to Where You Want to Be
1. tax strategy
• income • estate and gift
2. investment strategy
• selection • portfolio balancing and asset allocation
• diversification
3. risk management strategy
• life • health & long-term care
• disability • asset preservation & protection
• property & liability
4. wealth transfer strategy
• estate planning • trusts
• retirement plan beneficiary elections • business succession
• titling • charity
The length of the report must be determined by the task set by the client (does the client want you to do a full analysis or just solve one or two problems?), by time and cost considerations, by your style as a professional, and by your feelings as to how much the client needs to know to have confidence in and take action on your suggestions.
