What is Financial Planning?

Financial planning is the process of wisely managing one’s finances to achieve certain goals and dreams, while at the same time helping negotiate the financial barriers that inevitably arise in every stage of life. The financial planning profession exists to help people make those financial decisions and achieve their life goals. Financial Planning mainly consists of the following steps:

Data acquisition
The profound and very detailed conversation with the customer is the first and most important step in any planning strategy. The financial planner has to collect every single information of his client that can an without any doubt will have effect on his financial and personal situation. He holds down the fortune positions and liabilities of his client, his complete cash-flow and tax situation such as the legal and optional insurance situation. Further more the financial planner keeps hold of the clients particular purposes and aspirations. Existing contracts, such as a last will and testament, are comprehended and recorded.

By connecting the acquired information, the financial planner creates the foundation for a complete analysis of the clients liquidity, wealth, tax, yield and risk situation.

The simulation generally reveals considerable discrepancies between the defined ideals and the reality; this comparison of target and actual situation is the point of departure for the financial planner who develops and presents objective and tangible proposals of optimisation to his client. Both the financial planner and the client have now the ability to decide which goals are primarily to be achieved. According to the clients’ priorities, the goals can be improvement of the yield of fortune risk reduction, improvement of the insurance situation, etc.

The realisation
The developed optimisation sanctions are co-ordinated with the client and his tax, insurance and/or legal advisor. These sanctions can be realised either by means of private (testament) or even corporate agreements/contracts.

A financial plan is to be considered as a "snapshot" and should regularly be updated, as it represents an individual service in due respect of the clients’ phase of life. An alteration of personal matters, for example marriage (or divorce) or a strove for independance, for example, bear enormous consequences, not only personally, but above all financially. In addition to altered personal ideals, the modification of law or taxation in the specific country and subject may cause considerable variance between the initial financial plan and the new reality. Even sudden alteration of the fortune and wealth situation of the client may be a reason to adjust the financial plan.

The advantages for providers offering the financial service financial planning
  • a healthy and long term customer relationship
  • an improved knowledge over the customers wealth and fortune, but also private life
  • a gain in expertise for a demanding clientele
  • business development and customer acquisition 
  • cross selling possibilities
  • improvement of income through the additional advisory fee

The advantage for the clients employing an estate planner

  • a safe and targeted fortune and wealth management
  • an overview over the actual state of fortune
  • individual problem solving and customised optimisation strategy
  • co-ordination of personal and corporate matters
  • complete advisory service from one single source
  • improvement of the yield of fortune and risk management