Step one: Communicate with transparency
During your initial meeting(s) with your wealth advisor, your advisor will clearly explain or document the services to be provided to you while defining both parties’ responsibilities. An explanation of how your advisors are paid and by whom will also be provided to you.
Step two: Gather information
The advisor asks for information about your financial situation and gathers all the necessary documents before advising you. In a discussion with the advisor, you will define your personal and financial goals, determine your time frame for results and examine your tolerance for risk as well as understand mutual expectations.
Step three: Analyze and evaluate your financial status
The advisor will analyze the information provided to assess your current situation and determine how you must proceed to address your goals. Depending on what services you have asked for, this could include analyzing your assets, liabilities and cash flow, current insurance coverage, investments or tax strategies.
Step four: Develop, present, and adjust the plan
The advisor will offer recommendations that address your goals, based on the information you provide. To make better-informed decisions the advisor will then review those recommendations with you. If you express any concerns over the recommendations by the advisor, the appropriate adjustments can be made.
Step five: Take action
Now that you have a comprehensive, personalized financial plan, it is time to act on it. You and the advisor should agree on how the recommendations will be carried out. The advisor will serve as your "coach," coordinating the implementation of the recommendations with you and other professionals such as tax and legal advisors.
Step six: Monitor the recommendations
A financial plan needs to change as your life changes. Your advisor will monitor your progress toward your goals, and keep you on track. Financial objectives, risk tolerance, and work and personal situations change over time. S/he will periodically review your situation and adjust the recommendations, if needed, as you balance life’s changes.