Goals based financial planning and building solid portfolios. 

Financial Planning Definition

Financial Planning is a collaborative process that helps maximize a client's potential for meeting life goals through Financial Advice that integrates relevant elements of the client's personal and financial circumstances. 

This may involve:
Determining investments to be made.
Reducing income tax liability.
Analyzing cash flow against one's budget.
Planning life insurance and other types of insurance.
Planning the purchase of real estate.
Saving for children's education.
Maximizing retirement income.
Working with your attorney to facilitate legacy planning.

Financial planning specifically helps you to:
Track income and expenses.
Determine net worth.
Mitigate tax liability.
Assess risk tolerance.
Save for major expenses, such as: Children's education
Real estate, car, boat, etc.
Special occasions like weddings and vacations
Plan estate, and fund estate taxes, if applicable.
Create an emergency fund.
Protect against financial crises with insurance in the event of disability or death.
Plan for retirement.

The process of financial planning entails several steps:

Step 1: Understanding Personal and Financial Circumstances: The financial planner first establishes a rapport with the client. The planner gathers quantitative and qualitative data on the client.
Step 2: Identifying and Selecting Goals: The planner collaborates with the client to translate life goals to financial goals, and sets realistic expectations.
Step 3: Analyzing the Client’s Current Course of Action and Potential Alternative Course(s) of Action: The planner uses the data gathered from the client’s financial records to ascertain their financial status. When necessary, alternative courses of action are considered.
Step 4: Developing the Financial Planning Recommendation(s): The planner has to design a plan that provides flexibility, liquidity, protection, and minimizes taxes.
Step 5: Presenting the Financial Planning Recommendation(s): The planner presents recommendations to the client in a clear and understandable manner. 
Step 6: Implementing the Financial Planning Recommendation(s): The planner works to ensure that the client implements and adheres to the plan. The planner's implementation responsibilities are required unless specifically excluded from the scope of the engagement.
Step 7: Monitoring Progress and Updating: Planning is an ongoing process. Hence, the planner must constantly review the client’s financial plan and tailor it to the client’s current goals.

Building a diversified portfolio.

During the financial planning process and/or after filling out an investment questionnaire, the risk tolerance will be determined. Your current portfolio (if one exists) can be matched with a proposed portfolio. The proposed portfolio is one that has the best probability of helping the client get to their stated goals. 

Probability of success can be illustrated with the help of good financial planning software. After determining goals, we ask the software what allocation of stocks, bonds, real estate, etc. gives us the best probability for reaching our stated goal.