Hello and welcome back to our financial literacy series on financial planning. In the last post I outlined Step #4 in the planning process – the Financial Prescription™. Today we’re going to cover the 5th step. This is what I call – Filling the Financial PrescriptionTM more commonly known as implementing the financial plan!

The Goal of Step 5:

Up to this point in the process you’ve shared your hopes, dreams and fears for the future – your vision, along with all that pesky financial data.  Your planner reviewed it all and “diagnosed” your situation to uncover what’s working and what’s not in your financial life.  

By now your planner has provided you with a Financial Prescription outlining how to make improvements in your overall financial health to achieve your vision of the future.  Hopefully it’s been an interactive process where you’ve provided input to truly make this your plan.  You’ve had a chance to consider all the options and are comfortable with the ones you have chosen.  

What’s Next?

Just like going to the doctor – it’s time to fill your prescription or start your treatment plan.  Let’s face it, without doing what your doctor prescribes your health is not likely to change. Likewise with your Financial Plan, it is only going to be as effective as the ACTIONS you take to put it into place.

Newton’s first Law - the Law of Inertia can be applied here.  It describes the behavior of objects when no external force is acting upon them. “An object will remain in its state of rest or uniform motion unless a force is applied to change that state”.  If there’s no action (external force) to implement the recommendations (object) in your plan, there will be no change or movement towards fulfilling your vision!

How to Implement your plan

To get started there are a few things you should keep in mind when implementing your new plan.

  1. Remember, implementation is part of your planners’ job. They are there to guide and assist you, so make sure to take full advantage and keep them accountable.
  2. A professional plan should include a Checklist or Task List with the recommendations and associated tasks. It should lay out who is responsible for each task, the target date and a place to mark off as completed. This is a valuable guide to help keep you on track.
  3. Prioritize the recommendations with your planner and work on the most important ones first.  For instance, if you have young children, no Will, no life insurance, you want to save for retirement, and have limited surplus cashflow, what should you do first?
    From a risk perspective the life insurance and Will should be implemented first. After all, how far would a few thousand dollars of savings go to support your spouse and child if you died prematurely with a large mortgage, and your estate was taken over by the public trustee?
  4. Do the recommendations fall within the scope of your engagement? (from step #1) That is, did you hire the planner to provide products from their firm or are they responsible for introducing you to other professions or specialists?
  5. Who’s responsible for what on the Checklist? What tasks do you need to do, and do you require any clarification on scope or timing?  What about the advisors’ tasks – when will next appointments be booked and with whom – the advisor, a team member, a specialist or other professional from another firm? Will they contact you, or are you to contact them?  There could be some logistics that need to be addressed, so make sure you are clear, and that the checklist is complete.
  6. Based on your priorities some things may have to wait to be addressed later than others, or by outside professionals or specialists. BE PATIENT - it can take time for introductions, next appointments, applications, account transfers, arranging medicals and all the paperwork that’s required. This is all just part of the process!
Summary

Change isn’t easy. Up to this point there’s been a lot of work done by you and your planner, so make sure to stay the course and see it though. A professional planner will take charge of the implementation phase because they understand the importance of Newtons First Law.  After getting to know you and your financial situation inside and out, they are quite invested in your success and will want to see you achieve your goals and live your ideal life.  

Next time we’ll take a deep dive into what’s involved in the final step – The Financial Fitness Review™.  I look forward to our continued educational journey together, helping you get started on your financial plan.  

Until next time, remember ……..Without a Plan – It’s Only Money!

Additional Resources:

If you would like additional detail on these steps, or the broader financial planning process, check out our future posts in this series.  Or you can e-mail me at info@truenorthretirement.ca and ask for our The Fearless Retirement BlueprintTM.  

Also, you can visit the FP Canada website for the Canadian public at:  https://financialplanningforcanadians.ca

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