SmartMoney Monday: What is Financial Planning? - Hawaii News Now - KGMB and KHNL

SmartMoney Monday: What is Financial Planning?

For the next few weeks, we’ll cover information on financial planning. To set the foundation for this topic, Chris Otto from Bankoh Investment Services, Inc., a non-bank subsidiary of Bank of Hawaii joins Sunrise.

The  world of financial planning can be complex. It differs based on each individual’s needs and expectations. Some people may just want insight; others may want a formalized plan with actionable steps and recommendations. To navigate the world of finances, a planner can help by providing guidance and tools to help clients clarify and achieve their goals.  

If you decide to work with a financial planner, you’ll generally follow a process of six steps.

  • The first is to establish and define the client-planner relationship. Your financial planner should explain the services and define your responsibilities. Along with compensation, you’ll discuss how long the professional relationship will last and how to make decisions.
  • Step two is to gather client data and necessary documents. Together, you’ll define your personal and financial goals, including time frames. You’ll discuss comfort level for financial risks.
  • The third step is to evaluate your current financial status. Your advisor will consider all aspects of your situation to determine how to meet your goals.  In doing so, he or she may analyze your assets, liabilities and cash flow, insurance coverage, investments or tax strategies.
  • The fourth step is to develop recommendations. Your planner will present these to you so you can make informed decisions. He or she will listen to your concerns, and revise recommendations if necessary.
  • Fifth, you’ll implement the recommendations. Your planner may serve as your coach, and can coordinate the process with you and other professionals, like attorneys and stockbrokers.
  • Last step is to monitor the recommendations. As you work toward your goals, you’ll need to decide who will monitor your progress to make sure you’re staying on track. Your planner can check in to review your situation and adjust any recommendations.

Next week, we’ll discuss how to prepare for financial planning by getting all of your documents in order.

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