March 2008

The seven elements of successful planning

Do you have your whole future in front of you? Or perhaps you’re about to take an important step in your life. Are you wondering how to make the most of it? When you’re setting out to discover a new place, the first thing you do is look at a map, right? Well, when you’re embarking on your future, a good financial security plan will guide you to the right destination.

It’s reassuring to know where you are. It’s even better to know that you can achieve your ambitions for the future. Good planning will guide your decisions so that you can do just that. It will allow you to optimize your financial position and your legacy, in light of your personal dreams and the inescapable realities of day-to-day life.

However, you must realize that there are a few rules to follow in order to successfully plan for your financial security. Anyone who offers you a new insurance policy, for instance, without taking the time to inquire about your current situation and future ambitions is revealing a blatant lack of vision. Sure, your financial security may be improved, but is it really the best, or only, way to move closer to your dreams?

A seven-element action plan

Any effective planning for your financial security must begin by having you draw up an accurate, realistic and complete portrait of your current situation. To achieve this, your planning has to be multidisciplinary, that is, it has to consider every element that is likely to impact on your financial position both now and in the future. These elements, seven in all, are listed in the table below.

A financial security advisor will be able to suggest a comprehensive approach. He or she has the benefit of expertise, training, and the professional relationships needed to give weight to each of the seven elements of financial security planning. Based on your needs, your financial security advisor will call on specialized colleagues:  notary, lawyer, tax specialist, and others.


Overview of what your advisor will do


Define your civil and marital status. Identify your contractual and informal obligations to the people around you.


Ascertain everything about your income and expenses. Describe your employment relationship, salary level, employee benefits, and opportunity for advancement. Chart your expenses, debts, and asset value (residence, investments, etc.). Determine your ability to save.


Establish your tax status, assess the applicable tax rate and the ways you can reduce your tax burden.


Identify your sources of retirement income. Develop different scenarios for accumulating the capital required to maintain your quality of life, no matter what your situation is.


Define your investment performance goals and needs, as well as your investor profile, especially vis-à-vis your risk tolerance. Develop suitable investment strategies based on this information.


Analyze the situation in the event of death to assess the legal, tax, and financial impact and measure the consequences for your family. Define strategies to preserve your family legacy.


Assess the risks that could lead to short- or long-term disability to provide financial support for yourself or your family. Define the coverage needed to balance these risks.

When all is said and done, your financial security advisor’s ability to suggest a multidisciplinary approach based on a comprehensive vision is what makes his or her role particularly valuable. Your advisor can become a true partner, one who can help you make the choices that will allow you to get to where you want to be. 

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