Illustrated woman talking about the steps of financial planning

The Financial Planning Process: Why and How

Learn the steps a financial advisor takes to build your financial plan.

BECU Investment Services

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Planning personal finances used to be the worry of the wealthy and their worry — usually preservation of wealth — was attended to by teams of trust officers and lawyers. Many of today's middle-class families have different concerns: funding retirement; educating children; preserving assets; and coping with unexpected changes in health, employment and marital situations. Whether your goal is to build or preserve assets, it may be better to start sooner rather than later.

Where do you begin? Once you have the resolve, you may choose to work with a financial advisor whose services reside in the planning process itself. They can help you focus on the big picture and may hold licenses and credentials allowing them to provide specialized services or products related to accounting, taxes, insurance, and investing. Rather than zeroing in on such issues, your financial advisor will start where you are, guiding you through an organized and methodical process.

Step One: Building the Relationship

Financial advisors typically follow a set procedure in helping you develop a long-range financial strategy. The first step is to establish and define the relationship by delineating the responsibilities of each so that you fully understand the nature and extent of the services provided. At this point, you may discuss how the financial advisor will be compensated — flat fee, a percentage of your assets, commissions paid by a third party for products included in your plan or a combination.

Steps Two through Four: Exploring Your Financial Life

Step two may involve identifying your personal and financial goals, your time horizon for achieving them, and the level of risk you are comfortable assuming. A detailed questionnaire may be used. Step three consists of comparing your stated goals with your current financial situation — your assets, liabilities, cash flow, insurance coverage, investments and taxes. Step four offers concrete recommendations on ways to help work toward your goals using your current resources.

Steps Five and Six: Implementing an Action Plan

Having agreed on an action plan, step five is when you and the financial advisor decide who will implement the strategy. This step may involve either you or the advisor engaging the services of a specialist, an insurance agent or accountant, for example. The sixth and final step is really an ongoing one: Periodically reviewing your progress toward your goals and checking that your strategy is still in sync with your objectives.

Over and above your situation, you should feel free to discuss with your financial advisor any changes in the economy, stock market, and tax laws that you think may have an impact on your financial strategy. The more “in touch” you are with your financial advisor, the more attuned your financial strategy may be with your needs and goals.

Talk to a Financial Advisor

Financial advisors with BECU Investment Services are here to help. They get to know you and understand your goals so they can implement a financial and investment strategy that's best for you. Set up a complimentary consultation or call 206-439-5720.

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. BECU and BECU Investment Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using BECU Investment Services, and may also be employees of BECU. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, BECU or BECU Investment Services. Securities and insurance offered through LPL or its affiliates are:

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Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

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