Gathering quantitative financial planning data is usually easier than determining the qualitative portion of a financial plan. This is due to the fact that financial quantitative data is usually objective and is not subject to personal opinion; so in short, the numbers are the numbers.
The following list of financial data will help you complete step two of the financial planning process. Some financial plans require more data than others. Once the data collection phase is complete, you will need to organize your financial planning data. This information will help determine your current financial situation and what you will need to do in order to meet your financial planning goals and objectives.
Financial Data and Documentation
Most of the financial planning data that you will need can easily be found online. This is due to the fact that many financial service companies have embraced technology for the delivery of financial information (it saves them money). Anyway the following data elements play a key role in the financial planning process.
Salary and Income Data - In order to create your income statement and forecast future earnings you will need to locate your salary and income data. You can usually find it on your paycheck stubs, bank account statements or employment contracts.
Checking and Savings Accounts - Calculating your statement of financial position, retirement needs and savings requires understanding current cash levels. This data can be found on your most recent bank statements.
Brokerage and Retirement Accounts - In addition to understanding how much cash is on hand, financial advisors will need to know what other assets and holdings you own. This includes all of your current stocks, bonds, options, etc. Your statement should include when you purchased the asset, how much you originally invested and it’s current value. These are all important data points.
Mortgages, Notes and Loans - The other half of the statement of financial position includes a total of your liabilities. This entails finding all of the data about your debt, loans and mortgages. Your bank statements will usually include all of this information, however getting ahold of your mortgage escrow statement can also be helpful.
Historical Tax Returns - Tax returns hold a lot of the data that you can use to determine income and tax rates, provided that they are accurate. Your tax returns can help determine trends in your income, asset and tax levels and help forecast your future financial needs.
Insurance Information - Collecting insurance information (life, vehicle, real estate, health, etc.) will help determine if you have the right coverage and if your rates are fair and competitive.
Estate Planning Data - Finally you should collect all of the estate planning data that you have. This includes trusts, wills, and other estate related data.
Now that you have collect all of the financial planning data that you need, its time to create your financial planning statements. This is the first step of the financial analysis portion of the financial planning process.