The following information was extracted from the Certified Financial Planner Board of Standards website. See Related Links for further information..

What Is Financial Planning?

                Financial planning is the process of meeting your life
                goals through the proper management of your finances.
                Life goals can include buying a home, saving for your
                child's education or planning for retirement.

                The financial planning process consists of six steps that
                help you take a "big picture" look at where you are
                financially. Using these six steps, you can work out
                where you are now, what you may need in the future and
                what you must do to reach your goals.

                The process involves gathering relevant financial
                information, setting life goals, examining your current
                financial status and coming up with a strategy or plan for
                how you can meet your goals given your current situation
                and future plans.

The Benefits of Financial Planning

                Financial planning provides direction and meaning to
                your financial decisions. It allows you to understand how
                each financial decision you make affects other areas of
                your finances. For example, buying a particular
               investment product might help you pay off your mortgage
                faster or it might delay your retirement significantly. By
                viewing each financial decision as part of a whole, you
                can consider its short and long-term effects on your life
                goals. You can also adapt more easily to life changes
                and feel more secure that your goals are on track.

The Financial Planning Process

                The financial planning process consists of the following
                six steps:

                1. Establishing and defining the client-planner
                relationship.
                The financial planner should clearly explain or document
                the services to be provided to you and define both his
                and your responsibilities. The planner should explain
                fully how he will be paid and by whom. You and the
                planner should agree on how long the professional
                relationship should last and on how decisions will be
                made.

                2. Gathering client data, including goals.
                The financial planner should ask for information about
                your financial situation. You and the planner should
                mutually define your personal and financial goals,
                understand your time frame for results and discuss, if
                relevant, how you feel about risk. The financial planner
                should gather all the necessary documents before giving
                you the advice you need.

                3. Analyzing and evaluating your financial status.
                The financial planner should analyze your information to
                assess your current situation and determine what you
                must do to meet 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.

                4. Developing and presenting financial planning
                recommendations and/or alternatives.
                The financial planner should offer financial planning
                recommendations that address your goals, based on the
                information you provide. The planner should go over the
                recommendations with you to help you understand them
                so that you can make informed decisions. The planner
                should also listen to your concerns and revise the
                recommendations as appropriate.

                5. Implementing the financial planning recommendations.
                You and the planner should agree on how the
                recommendations will be carried out. The planner may
                carry out the recommendations or serve as your "coach,"
                coordinating the whole process with you and other
                professionals such as attorneys or stockbrokers.

                6. Monitoring the financial planning recommendations.
                You and the planner should agree on who will monitor
                your progress towards your goals. If the planner is in
                charge of the process, she should report to you
                periodically to review your situation and adjust the
                recommendations, if needed, as your life changes.