Financial planning works for everyone because it is not a one size fits all solution

-By: Tsholofelo Dihutso, CPRP

Communications Specialist at Financial Planning Institute (FPI).

Financial planning is a process of structuring, arranging and managing your financial affairs to best meet your life goals. These can be as short term as saving for a car, to long term such as planning for retirement. Most importantly, financial planning also looks at how everything fits together so that you achieve financial certainty and clarity on your current and future financial wellbeing. The Financial Planning Institute’s (FPI) 2016 Global Consumer Survey found that 55% of South Africans don’t know where to start the process of financial planning and that 76% of South Africans want to work with a CERTIFIED FINANCIAL PLANNER® (CFP®) professional in order to come up with a long-term plan that is tailored to their specific needs.

To receive and benefit from sound financial planning advice, a simple yet thorough process needs to be undertaken. This process is known as the Financial Planning Six Steps Process, these steps are important in developing a plan that is tailored to your own unique circumstances:

  1. Establishing and defining a professional relationship

The initial contact is dedicated to establishing a clear understanding of your immediate needs and/or concerns as well as getting a firm grasp of what services the financial planner provides.

  1. Gathering data, including goals

Having clear goals and providing accurate financial information is key in ensuring a meaningful financial plan. You and the financial planner should mutually define your personal and financial goals, understand your timeframe for results and discuss, and if relevant, how you feel about risk.

  1. Analysing and evaluating your financial status

With clear goals set and your financial information at hand, the financial planner is able to “draw a line in the sand” and establish where you are in relation to your goals. Depending on what services you have asked for, this could include analysing your assets, liabilities and cash flow, current insurance coverage, investments or tax strategies.

  1. Developing and presenting financial planning recommendations and/or alternatives

Once your financial information has been analysed, the financial planner will guide you through the various financial decisions available and make recommendations accordingly. The outcome of the plan is to ensure that you have a plan to take you forward with confidence and provide certainty regarding your financial future.

  1. Implementing the financial planning recommendations

Both you and the financial planner should agree on how the recommendations will be carried out. Your financial planner may carry out the recommendations or serve as your “coach,” co-ordinating the whole process with you and other professionals such as attorneys or stockbrokers.

  1. Monitoring the financial planning recommendations

You and your financial planner should agree on who will monitor your progress towards your goals. It is important that your plan and any financial solutions that were implemented are reviewed on at least an annual basis. This is done to ensure that your plan remains relevant and meaningful in light of any changes in personal or financial circumstances.

People who engage in comprehensive financial planning feel closer to achieving their financial life goals. This is evident from the survey results which revealed that consumers in South Africa have higher confidence; than the global average; when it comes to achieving their financial life goals and they feel highly successful about sticking to their finical strategies.
Remember that in order to achieve your life goals, you need to engage with a CERTIFIED FINANCIAL PLANNER® professional who will guide you and conduct comprehensive financial planning.
To find a CERTIFIED FINANCIAL PLANNER® professional in your area and for more tips on financial planning, visit or call 086 1000 FPI (374). You can also join the Institute’s online community on Facebook (Financial Planning Institute of Southern Africa) and on Twitter (@FPI_SANews).


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