How should you present a financial plan?
Financial plan is the roadmap of an individual for whom the plan is been made. It shows the right picture of your current situation and also provides with the actions one must take to ensure one’s financial well-being. So it is the responsibility of the financial planner or adviser to prepare it in the most effective and efficient manner. It is equally important to present the same in the manner the client understands.
Financial plan involves clients financials such as his/her income, expenses, assets, liabilities, financial goals, insurance, financial planners recommendations, etc. It is also one of the tool for financial planners to explain the rationale behind the recommendations made in the financial plan. The written financial plan helps the clients to go-through his financial plan whenever he wants. It also allows him/her to go through the financial plan thoroughly and read it as many times as he/she wish to.
The financial plan can be in the following format. This financial plan outline is just an example and financial planners innovate to make the client experience better.
| Sections | Detailed contents |
| Executive Summary | This part should include the brief explanation of the whole financial plan. You may include the key highlights of the financial plan. |
| Current financial statements | This should include the cash flow statement which would contain client's income and expenses and networth statement which would include the client's assets, liabilities and networth details. |
| Financial goals | In this section, you can list down the financial goals of the client based on priorities. This include details such as the amount required, when it is required, etc. |
| Assumptions | This section should include all the assumptions made while preparing the financial plan. The assumptions such as rate of returns, inflation, etc. to be included in this section. |
| Strategy | In this section, the strategy to achieve the financial goals need to be mentioned. This should involve the strategy devised to achieve a particular goal based on the risk profile of the client. |
| Recommendations | Post devising the strategy, you need to provide recommendations as to what the client needs to do the next to make his way towards achievement of his/her financial goals. The recommendations may include redemptions from a particular investments, a fresh investments that needs to be made, etc. |
| Action plan | This section should involve the actions that needs to be taken from client end as well as from the financial planners end. |
| Fees and commissions | This section should clearly mention the fees and charges that the client needs to pay for availing the service of the financial planner. |
| Authority to proceed | This section includes the authority letter which would give permission to the financial planner to implement the financial plan by taking necessary actions as may be agreed by the client. |
| Disclosures | This should involve the commissions or brokerage that you may be receiving apart from the fees that you may be charging. This should include any such possible conflict of interest with the client whatsoever. |
| Disclaimers | Disclaimer should include the terms and conditions that are put forth by the financial planner. |