Data collection – First step to financial planning!


Financial planning is a process of understanding your financial situation, your financial goals and establishing a plan to achieve these financial goals. And the first and foremost important step in this holistic process is data collection.


Data collection is a comprehensive step which involves the planner to accumulate a huge amount of raw data which is required to make your plan. It is done through a series of questionnaires regarding each and every aspect of your financial situation. It requires time and patience of the planner, as well as a great deal of cooperation on the client’s part.

The data being collected by your financial planner forms the core of your plan. Hence every minute detail required by the planner must be provided to him. Leaving out any pivotal details could lead to insufficiency of funds at the time of requirement. To avoid this, simply the details required must be provided completely and correctly.


Data collection questionnaires focus on several aspects of your finances such as:


Assets and liabilities: It starts with getting a detailed picture of your total assets and liabilities. This will include your personal assets such as resident home, your car etc as well as your investment assets such as second homes, equity portfolio, debt portfolio etc. This helps the planner to analyze and understand your current financial situation.


Income and outflow statement: Your income and outflow statement will also form a part of your raw data. This is required to understand how much amount of money is required by you to maintain your lifestyle and your savings. This helps determine the amount of funds that need to be maintained at all times in your bank account as a contingency.


Life Goals: A pivotal part of data collection understands your financial goals you wish to achieve. Since a financial plan is meant to help you fulfill your goals, having the approximate amount required and the time frame for each goal allows the planner to plan your investment portfolio to ensure each of these are achieved.


Insurance: Knowing the details of the current amount of life insurance purchased by you helps to determine whether you are adequately covered or under insured. Life insurance plays a very important part of your financial health as it provides funds in case of your demise to your family to run their life and fulfill the remaining goals. Hence it is very important to ensure you are adequately covered. Even general insurance details need to be mentioned. Health, Critical illness, Personal accident and Property cover is also essential.


Estate Planning: Each one of us wants to leave something for our heirs. Hence, it is very important to mention the details of the estate you want to leave behind so as to ensure each and every wish of yours is fulfilled even after your demise.

We all have numerous goals we want to achieve. Our loved ones too have big dreams and we want to ensure we do not fall short in any way. A financial plan helps to bridge this gap between a shortfall and achieving your goals. So it is very important that you reveal all the correct information at the correct time to ensure your planner provides you with the most comprehensive plan to help you achieve your goals and ensure you never have to let your loved ones down.


By Shalmali Kulkarni.

The writer is working as a para-planner with



0 #2 construire-en- 2014-05-06 11:21
Appreciate this post. Will try it out.
0 #1 Dinesh Mehta 2012-02-27 11:07
This is an eye opener for all..
People tend to hide a lot of information without realising its importance.

Well written and explained!!

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