Financial planning engagement with a client

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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.

Sample Solution

Pre-Discovery Phase

Establishing Rapport and Understanding Goals

  1. Welcome and Introductions: Begin by welcoming the client, Jack Ryan, and introducing yourself and your team members.
  2. Establishing Rapport: Engage in casual conversation to build rapport and put the client at ease.
  3. Understanding Goals: Inquire about Jack Ryan’s financial goals and objectives for the future. Actively listen and take detailed notes.

Discovery Phase

Gathering Detailed Financial Information

  1. Reviewing Existing Information: Review the financial information provided by the bank, including assets, liabilities, income, and expenses.
  2. Collecting Additional Information: Gather additional financial information directly from Jack Ryan, such as investment statements, tax returns, and insurance policies.
  3. Understanding Risk Tolerance: Assess Jack Ryan’s risk tolerance and investment preferences to tailor the financial plan accordingly.

Analyzing Financial Situation and Identifying Needs

  1. Analyzing Cash Flow: Analyze Jack Ryan’s cash flow to identify any potential gaps or challenges.
  2. Evaluating Assets and Liabilities: Evaluate the composition and diversification of Jack Ryan’s assets and liabilities.
  3. Assessing Retirement Readiness: Assess Jack Ryan’s current retirement savings and preparedness.

Recommendations Phase

Developing a Comprehensive Financial Plan

  1. Formulating Strategies: Formulate investment strategies aligned with Jack Ryan’s risk tolerance and financial goals.
  2. Designing Tax Optimization Strategies: Design tax optimization strategies to minimize tax liabilities and maximize after-tax returns.
  3. Creating an Estate Plan: Create an estate plan to ensure the orderly transfer of assets and protect the interests of beneficiaries.

Presenting the Financial Plan and Addressing Concerns

  1. Explaining the Plan: Clearly explain the financial plan, including the recommended strategies, investments, and timelines.
  2. Addressing Questions and Concerns: Address any questions or concerns Jack Ryan may have regarding the plan.
  3. Encouraging Feedback: Encourage Jack Ryan to provide feedback on the plan and suggest any modifications.

Motivating the Client and Ensuring Implementation

  1. Highlighting Benefits: Emphasize the benefits of financial planning and how it can help Jack Ryan achieve his goals.
  2. Providing Ongoing Support: Assure Jack Ryan of ongoing support and guidance throughout the implementation process.
  3. Scheduling Follow-up Meetings: Schedule follow-up meetings to review progress, make adjustments, and address any new financial concerns.

Additional Considerations

  1. Tailoring the Approach: Tailor the financial planning approach to Jack Ryan’s specific needs, preferences, and learning style.
  2. Effective Communication: Communicate effectively throughout the engagement, using clear, concise language and avoiding jargon.
  3. Building Trust: Build trust with Jack Ryan by demonstrating expertise, professionalism, and genuine care for his financial well-being.

By following these steps and guidelines, you can effectively engage Jack Ryan in the financial planning process, develop a comprehensive and personalized plan, and motivate him to take action and achieve his financial goals.

 

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