What is financial planning?

In order to prepare for your future, you will need to find a way that you can manage your finances to achieve your life goals. Financial planning will help you to do this and the financial planning process follows the Six Steps approach. Each of these steps are important in developing a plan that is tailored to your own unique circumstances:

Benefits of financial planning

Having a detailed financial plan provides you with a strategy to make practical financial decisions in all aspects of your life. Following and sticking to a plan allows you the best possible chance of success in achieving your life goals and long-term financial security. 

Financial planning can help you prepare for:
  • Buying a car
  • Further education
  • Buying a house
  • Marriage
  • Children
  • Retirement


Find out more on how you can become a professional financial planner and attaining one of our membership designations.

The Six Steps of Financial Planning are:

1Establishing and defining a professional relationship 

The initial contact is dedicated to establishing a clear understanding of your immediate needs and/or concerns as well as getting a firm grasp of what services the financial planner provides.

2Gathering data, including goals

Having clear goals and providing accurate financial information is key in ensuring a meaningful financial plan. You and the financial planner should mutually define your personal and financial goals, understand your timeframe for results and discuss how you feel about risk

3Analysing and evaluating your financial status.

 With clear goals set and your financial information at hand, the financial planner is able to “draw a line in the sand” and establish where you are in relation to your goals. Depending on what services you have asked for, this could include analysing your assets, liabilities and cash flow, current insurance coverage, investments or tax strategies.

  • 4Developing and presenting financial planning recommendations and/or alternatives
  • Once your financial information has been analysed, the financial planner will guide you through the various financial decisions available and make recommendations accordingly. The outcome of the plan is to ensure that you have a plan to take you forward with confidence and provide certainty regarding your financial future.
  • 5 Implementing the financial planning recommendations
  • Both you and the financial planner should agree on how the recommendations will be carried out. Your financial planner may carry out the recommendations or serve as your “coach,” co-ordinating the whole process with you and other professionals such as attorneys or stockbrokers.
  • 6 Monitoring the financial planning recommendations
  • You and your financial planner should agree on who will monitor your progress towards your goals. It is important that your plan and any financial solutions that were implemented are reviewed on at least an annual basis. This is done to ensure that your plan remains relevant and meaningful in light of any changes in personal or financial circumstances.

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