A Financial Planner or Personal Financial Planner is a practicing professional who helps people to deal with various personal financial issues through proper planning, which includes but is not limited to these major areas: cash flow management, education planning, retirement planning, investment planning, risk management and insurance planning, tax planning, estate planning and business succession planning (for business owners). The work engaged in by this professional is commonly known as personal financial planning. In carrying out the planning function, he is guided by the financial planning process to create a detailed strategy tailored to a client`s specific situation, for meeting a client`s specific goals.
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Personal financial planning is broadly defined as a process of determining an individual`s financial goals, purposes in life and life`s priorities, and after considering his resources, risk profile and current lifestyle, to detail a balanced and realistic plan to meet those goals. The individual`s goals are used as guideposts to map a course of action on `what needs to be done` to reach those goals.
A financial planner specializes in the planning aspects of finance, in particular personal finance, as contrasted with a stock broker who is only concerned with the actual investments, or with a life insurance intermediary who advises on risk products.
Financial planning is usually a six-step process, and involves considering the client`s situation from all relevant angles to produce integrated solutions. The six-step financial planning process has been adopted by the International Organization for Standardization (ISO) and the details can be obtained from the organisation. Financial planners are also known by the title financial advisor in some countries, although these two terms are technically not synonymous, and their roles have some functional differences.
Although there are many types of `financial planners`, the term is used largely to describe those who consider the entire financial picture of a client and then provide a comprehensive solution. To differentiate from the other types of financial planners, some planners may be called `comprehensive` financial planners.
Other financial planners may specialize in one or more areas, such as, insurance planning and retirement planning.
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