A Certified Financial Planner, or CFP, can help with a wide variety of money issues. They may work with individuals, businesses, or trusts to develop long-range plans for growing and maintaining assets. They do this in a number of ways. One way they help is by assisting clients in defining financial goals. Money doesn't grow as effectively when there is no end-goal in sight. Having a set target helps maintain focus. For businesses that goal might be something like reducing overall debt-load, increasing equity, or even gaining enough cash to expand into new markets. Individuals might set a goal of paying for a child's college expense or savings for a long and relaxing retirement. In addition to defining goals, a responsible CFP will outline problem areas. That could be anything from carrying too much debt, to not having sufficient savings, to a business with outdated equipment and no money to replace it. All of that goes into a plan. This is used, like a road map, to help client and planner work together. The plan will usually outline what the goals are, both short and long-term. It will also outline problems, opportunities, and ways to deal with both. Finally, it will provide a framework for achieving the set goals. That might include investment strategies, savings goals, or expansion plans. Some professionals will provide options with differing degrees of risk, but most set one main plan based on the client's risk preference. Many will encourage clients in more conservative directions. Finally, a Certified Financial Planner helps the client implement their plan. They assist in purchasing investments. They can help work out budgets. Most importantly, they keep up with how the plan is working, and review it on a schedule that works for the client. Because a plan that isn't working can be worse than no plan at all.
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