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Financial Planning
Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority.)

Personal financial planning involves the evaluation of a person's current financial position and financial goals leading to a presentation of a plan to achieve those goals.  A typical financial plan includes the following:

  1. A balance sheet analysis

  2. Projection of cash flow

  3. Long-term accumulation plans for retirement, education, etc.

  4. Statement of individual's goals

  5. Insurance analysis

  6. Estate and tax planning

  7. Projection of income taxes

  8. Overview of weaknesses and strengths in the individual's financial outlook

  9. Recommendations for implementing the plan

Financial planners charge clients in one of three major ways:  a fee-only basis, a fee-and-commission basis, or on a commission basis.

Currently two professional organizations accredit planners after they have completed certain educational and professional requirements:  The College for Financial Planning confers the Certified Financial Planner (CFP) and the American College confers the Chartered Financial Consultant (ChFC) designation.  Two major professional organizations are associated with financial planning:  the International Association for Financial Planning and the Institute of Certified Financial Planners.

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