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40% of U.S. workers have saved
less than $25,000 for retirement.*

*2019 Retirement
Confidence Survey, EBRI

Only 42% of Americans know how
much money to save for retirement.*

*2019 Retirement Confidence Survey, EBRI

43% of retirees left
the workforce earlier
than planned.*

*2019 Retirement
Confidence Survey, EBRI

How does a Financial Plan Start?







The process of Financial Planning is an art and a science.  When it was developed over 60 years ago, it was the intersection of the private banking and investment industry.  Along the way, risk management, goal setting and other analytical methodologies were added.  And as such, the process has split into 2 usages: one Goal Based and the other Cash Flow Based. Cash Flow Based, or at Chestnut what we call Gap Analysis, is more complex, and a better way to achieve your objectives. 


The art of financial planning stems from the fact that it addresses the client’s reasons for financial actions and the ways and means for attaining goals.  It is easily stated by saying that it is about all the “dreams, deposits, demands and deadlines.”  The role of the planner is to enable or facilitate the client in their effort to define their financial life in their terms and in their numbers.  Using an informal question and answer process, information is gathered about the client’s past, present and future.  This is then organized into notes, then a report, which are reviewed with the clients and then finalized into the financial plan.

The science of financial planning in the many methodologies applied to the client’s is the analysis of a person or family’s strength and weaknesses as they relate to stated goals and deadlines.  It is a science because using the analytical methods over and over produces consistent results and outcomes.  The replication encourages the client to try various scenarios or approaches.

Over the past years Financial Planning has evolved into a six-step process.  These six steps are applicable to any goal or the client’s overall situation.  In addition, they are sanctioned as the steps all Certified Financial Planners must follow if practicing financial planning.  Called “Practice Standards”, they enable the consistency of effort for any client.

  • Step One:  Defining the Scope of Engagement

Before any engagement of the client can occur, a mutually agreed on set of actions, disclosures, and responsibilities has to be specified.The other constraints are the duration of the engagement and the unique circumstances which may limit the scope in any way.


  • Step Two:  Gathering the Client’s Personal and Financial Goals, Needs and Priorities

A thorough and total inventory of a client’s situation is crucial to making good financial planning headway.Such things as values, attitudes, experiences and expectations are all important to germane planning.The goal setting process covers budgeting, education, retirement, investments, risk management and their estate.Therefore, qualitative and quantitative issues have to be covered.

  • Step Three:  Evaluation of Client Data and Formulation of a Plan

From all the information, the strength and weaknesses are gleaned.The evaluation emphasizes whether the goals are adequately met by the client’s resources and current course of action.Such issues as expectations and assumptions serve as the basis for a full formulation of a personalized financial plan.


  • Step Four:  Presentation of Financial Plan Recommendations and Client Input

Presenting financial plan alternatives and recommendations has the effect of giving the client a track to run on.This happens after a full discussion about the plan and its effect on the client’s financial life. Sometimes the report may be short, mid or long in length.This is determined by the needs of the client.


  • Step Five:  Implementation for the Financial Plan

The implementation process is up to the client or Chestnut Investment Advisory.In other words, the doing of the what, where, how, and to what extent is up to the agreed on scope of engagement.Selection of products and services is completed consistent with goals.Implementation demands the greatest diligence and ethics, and assumes that the client trusts that all actions are on their behalf.It is at this point that an Investment Policy is created and a strategy of asset allocation followed.


  • Step Six:  Monitoring and Reviewing

The process of monitoring the plan and implementation steps is mutually defined.What monitoring means is in the context of the financial plan and the client’s ever changing financial life.What is watched and reported about will vary from person to person and case to case.










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Check the background of this financial professional on FINRA's BrokerCheck