Financial planning engagement with a client
conduct a full financial
planning engagement with a client, including the pre-discovery, discovery,
analysis, and recommendations phase of the financial planning process. It
will require you to draw on your learning from all your courses, including
what you what learned in FIP509, about how to conduct effective and
efficient meetings with clients.
Client Scenario
Your group works as financial planners in the financial planning division of a
bank. You can choose the name and color scheme of your bank. A personal
banker (named Franklin) at your institution recently called one of the bank’s
clients, Jack Ryan, to discuss the opportunity for him to meet the financial
planning team. The client agreed and your team has received a referral from
the personal banker, along with the information the bank has on file about
Jack Ryan (see Exhibit 1). This information includes the assets and liabilities
that the client currently has at the bank.
Your role is to engage the client in the financial planning process.
Evaluation
Your ability to engage the client in the financial planning process will be
evaluated on your ability to engage the client in effective and efficient ways
to complete the pre-discovery, discovery and recommendations action
required to motivate the client to move forward with your recommended
plan.
Financial Planning Engagement with Jack Ryan
Pre-Discovery Phase
Objectives:
- Establish rapport and build trust with the client
- Gather initial information about the client's financial situation and goals
- Determine the scope of the financial planning engagement
- Initial contact: The financial planner initiates contact with the client, either by phone or email, to confirm the appointment and gather any additional information that may be helpful for the meeting.
- Meeting preparation: The financial planner reviews the client's information on file and conducts additional research to gain a comprehensive understanding of their financial situation.
- Welcome and introduction: The financial planner warmly welcomes the client and introduces themselves and their team. They explain the purpose of the meeting and outline the agenda.
- Deepen understanding of the client's financial situation, goals, and priorities
- Identify any financial challenges or obstacles
- Uncover the client's risk tolerance and investment preferences
- Icebreaker: The financial planner engages in a brief conversation with the client to establish rapport and ease any nervousness.
- Financial history: The financial planner asks the client about their financial history, including their income, expenses, assets, and liabilities. They may also inquire about their employment history, education, and family situation.
- Financial goals: The financial planner discusses the client's financial goals, both short-term and long-term. They explore the client's motivations for these goals and their desired timelines for achieving them.
- Risk tolerance assessment: The financial planner evaluates the client's risk tolerance using various assessment tools or questionnaires. This helps determine the client's comfort level with investment fluctuations and potential losses.
- Investment preferences: The financial planner discusses the client's investment preferences, including their preferred asset allocation, risk appetite, and time horizon.
- Analyze the client's financial data and identify any gaps or discrepancies
- Develop a cash flow statement to assess the client's current financial position
- Evaluate the client's investment portfolio and suggest potential adjustments
- Data review: The financial planner reviews the client's financial data in detail, ensuring accuracy and completeness. They may identify any inconsistencies or missing information that requires further clarification.
- Cash flow analysis: The financial planner prepares a detailed cash flow statement that outlines the client's income, expenses, and net cash flow. This helps assess the client's current financial standing and identify any potential cash flow constraints.
- Investment portfolio evaluation: The financial planner evaluates the client's investment portfolio, considering its alignment with their risk tolerance, goals, and time horizon. They may suggest adjustments to optimize the portfolio's performance and risk profile.
- Develop a comprehensive financial plan tailored to the client's needs and goals
- Present the financial plan to the client in a clear and understandable manner
- Address any questions or concerns from the client
- Encourage the client to implement the recommended plan
- Financial plan presentation: The financial planner presents the comprehensive financial plan to the client, outlining the strategies and recommendations tailored to their specific situation. They explain the rationale behind each recommendation and address any potential concerns or questions.
- Action plan development: The financial planner collaborates with the client to develop an action plan that outlines the steps required to implement the recommended strategies. They may assign specific tasks and timelines to ensure accountability.
- Ongoing review and monitoring: The financial planner emphasizes the importance of ongoing review and monitoring of the financial plan. They schedule regular meetings with the client to track progress, make adjustments as needed, and adapt to changing circumstances.