Identifying Steps in the Financial Planning Process

Lisa, a CFP® professional, is working with her client, Tom. After gathering all necessary information about Tom’s financial situation, including his income, expenses, assets, liabilities, and risk tolerance, Lisa analyzes the data. She identifies that Tom’s current investment allocation is not aligned with his long-term retirement goals and recommends reallocating his portfolio to better match his objectives and risk tolerance.

Which step of the 7-Step Financial Planning Process is Lisa performing?

  1. Analyzing the client’s current financial status.
  2. Developing financial planning recommendations.
  3. Implementing the financial planning recommendations.
  4. Monitoring progress and updating the plan.