Sunday, February 26, 2006

The 6 Steps of the Financial Planning Process

The 6 Steps of the Financial Planning Process

Hi, again!

I thought you might find it useful to consider the steps that should be taken whenever you deal with a professional financial planner. Of course, precise approaches vary with individuals, but the official '6 Steps of the Financial Planning Process' advocated by the Certified Financial Planner Board of Standards is, in my opinion, a cornerstone of good practice.

So, if you decide that financial planning is something that you want to learn more about, even if only to make sure you stand a better chance of putting together a D-I-Y financial planning programme for yourself, then I'm pretty sure you'll find the official CFP website,, a useful one to know about.

According to that Board of Standards, those 6 steps are:

  1. Establish the client-planner relationship
  2. Gather data
  3. Analyse the data
  4. Develop a plan or a few possible plans
  5. Implement the chosen plan
  6. Monitor the plan

Of course, if you decide to go down the do-it-yourself (D-I-Y) route, then all you'll need to do to fulfill step 1 is smile at the person in the mirror! It may take a long time to go through all 6 steps but making a start on them will increase the chances that over the long haul you and your family have a better life.

To help you make a tangibly useful start today, if you want to, here's something that you might find helpful:

If you'd like to learn a little bit about how to set up a reserve account, or what I refer to as an emergency buffer account, you're welcome to do so here.

Till next time...

Warmest regards,


Rajen Devadason is CEO of RD Book Projects and its sister company RD WealthCreation Sdn Bhd. He lives in sunny, peaceful Malaysia with his gorgeous wife Rachel. He's a Malaysian Securities Commission-licensed financial planner, a life planning consultant, a professional speaker and a serial author... which probably explains why he's so exhausted! Some of his books are available here.


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