FINANCIAL PLANNING
description
Transcript of FINANCIAL PLANNING
![Page 1: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/1.jpg)
FINANCIAL FINANCIAL PLANNINGPLANNING
Simon LamOct 10, 2003
![Page 2: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/2.jpg)
Financial planning or personal financial planning is “a scientific workflow model that assists clients in determining their financial needs and resources, and provides a systematic method of achieving their goals and objectives in an optimal manner.”
Financial Planning Practice Standards of APLIC for FChFP designees
![Page 3: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/3.jpg)
The Key Role of the Financial
Practitioner/Planner
To remove financial worries from a client’s life as much as possible.
![Page 4: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/4.jpg)
THE SIX STEP FINANCIAL PLANNING PROCESS
1. Setting goals,objectives & priorities2. Gathering relevant data & information3. Analyzing information & assessing financi
al status4. Developing and presenting a financial pla
n for implementation5. Executing the financial plan6. Monitoring execution & reviewing of the fi
nancial plan
![Page 5: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/5.jpg)
Setting Goals, Objectives & Priorities
The Financial Planning Process1
![Page 6: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/6.jpg)
Client Motivation to Seek Financial Planning Services
A desire to insure against certain riskTo increase my expected income in retirementTo save tax
What else?
![Page 7: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/7.jpg)
The Financial Planning CirclePension adviser
The press
Friend
Estate agent
Insurance
Lawyer
Accountant
Stockbroker
![Page 8: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/8.jpg)
The Financial Planning CircleMotivation
Wills
Pensions
Selling business
Creating Time
Insurance
School fees
Tax saving
![Page 9: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/9.jpg)
To dig out the client’s need
![Page 10: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/10.jpg)
A Typical Individual’s Financial Life Cycle
INFLUENCES
•Marital
status
•Employment
•Economic
outlook
•Age
•Number of
dependents
•Family
money
![Page 11: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/11.jpg)
NEEDS VS WANTS
![Page 12: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/12.jpg)
Know Your Client!
Never judge a book by its cover
![Page 13: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/13.jpg)
Different Money Personalities
HoardersSpendersMoney monks
Moneyavoiders
Moneyworriers
Moneyamassers
Risktakers
Riskavoiders
![Page 14: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/14.jpg)
Goal Setting - SMART
S = specificM = measurableA = achievableR = realisticT = tangible
![Page 15: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/15.jpg)
List the client’s precise goals or objective and their priority ranking.
$ Dates
![Page 16: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/16.jpg)
Gathering Relevant Data & Information
The Financial Planning Process2
![Page 17: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/17.jpg)
TYPES OF INFORMATION REQUIRED
Quantitative
information
Qualitative information
![Page 18: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/18.jpg)
PERSONAL DETAILS
Names, genders, birth dates and
places
Health status of all members
Family structures and history
Employment information
![Page 19: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/19.jpg)
ASSETS AND LIABILITIES
Assets
Liabilities
Remember to advise your clientDon’t count everything
Set a value limit
Using Fair Market Value
![Page 20: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/20.jpg)
QUALITATIVE INFORMATION
Attitude to risk
Attitude to investment
Investment experience
Income needs
Investment time horizon
![Page 21: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/21.jpg)
Analyzing Information & Assessing Financial Status
The Financial Planning Process3
![Page 22: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/22.jpg)
Developing and Presenting a Financial Plan for Implementation
The Financial Planning Process4
![Page 23: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/23.jpg)
All Financial Plans Involve 3 Steps
Maximizing Income and Wealth
Using Money More Effectively
Monitoring ExpendituresPreparing the Pro-forma Cash Flow Statements (Budget Statements)
![Page 24: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/24.jpg)
The Interlocking Network of Financial Plans and Statements
Evaluate and plan major outlays Reduce taxes Establish savings/investment
program Manage credit Secure adequate insurance coverage
Monitor and control income, living expenses, purchases, and savings on a monthly basis
Actual financial results: Balance sheet Income and expenditures statement
Financial Plans
Budgets
Financial Statements
FEED
BA
CK
![Page 25: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/25.jpg)
There should be a balance between oral and written presentation
Presenting the Financial Plan
Preparation
Presentation
![Page 26: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/26.jpg)
PreparationPrepare the presentation documents
Prepare for the meetingKeep your office clean and neat Review the plan prior to the meetingPrepare list of point if necessaryBe groomed
![Page 27: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/27.jpg)
PresentationExplain the cost structures
Ensure client understandingListen to client’s concern and revise the recommendations as appropriateTime frames
![Page 28: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/28.jpg)
Executing the Financial Plan
The Financial Planning Process5
![Page 29: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/29.jpg)
Action PlanAction Plan
What
When
Whom
Coordination of other professionals
![Page 30: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/30.jpg)
Monitoring Execution & Reviewing of the Financial Plan
The Financial Planning Process6
![Page 31: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/31.jpg)
Checking and adjusting the execution to ensure goals and objectives listed are met.The plan should be monitored annually or at other agreed intervals, to ensure the client continues to progress towards his goals.
![Page 32: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/32.jpg)
Establishing Client-Practitioner Relationship
What is Relationship Marketing?
![Page 33: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/33.jpg)
Dialog is established with customer to discover
needs
Customers needs are addressed and
communicated
Purchase/Service is purchased
PRIMARY OBJECTIVE: Growing Customers
Relationship Marketing
Customeris predisposed to additional communications
![Page 34: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/34.jpg)
Client Relationship Management (CRM)
•CRM refers to the management of all interactions with the customer that an enterprise indulges in. Its focus is on managing and optimising the entire customer life cycle.
![Page 35: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/35.jpg)
Outcome of all smartCRM decisions
LoyalRelationship
Loyalty
![Page 36: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/36.jpg)
Customer LoyaltyCustomer Loyalty / Satisfaction Model
Lifetime
Sleepers
Trapped
Promiscuous
CUSTOMER SATIFACTIONHIGH LOWC
US
TO
ME
R
LOY
ALT
Y
![Page 37: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/37.jpg)
Implementing CRM
• Identifying your client
•Differentiating clients one from another
![Page 38: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/38.jpg)
Potential client?
![Page 39: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/39.jpg)
• Interacting with client
•Customizing your services to meet the client’s individual needs
• Meeting the client
![Page 40: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/40.jpg)
Sign contract with client
This contract should specify:
The range of services to be
performed by the financial practitioner
The method of
compensation The client’s responsibility in
the planning process
![Page 41: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/41.jpg)
Important Steps to Effective CRM
• Treat the Client as the Boss
• Go to see the Client• Don’t Make Excuses to the Client
• Take the Client’s Phone Calls• Provide the Client with
Proactive Feedback
![Page 42: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/42.jpg)
• Solicit Feedback From the Client• Do the Client’s Job
• Enhance the Product Delivered to the Client
• Allow the Client Easy Access to Staff
• Understand the Client’s Perspective
• Establish a Climate of Mutual Respect
![Page 43: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/43.jpg)
Things Not To Do
Taking the traditional insurance broking or selling approachDelegating to non-professionalsAccepting a half hearted commitmentFailure to sell the serviceFailure to get things doneFailure to move with the times
![Page 44: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/44.jpg)
10 MOST COMMON
MISTAKESMISTAKES
FIANANCIAL PRACTITIONERS MAKE
![Page 45: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/45.jpg)
Failing to take your own medicine
Elephant hunting with an unloaded gun while ignoring pet rabbits that will eat out of your hand
![Page 46: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/46.jpg)
Procrastinating
Putting product selection first
![Page 47: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/47.jpg)
Insisting on doing everything yourself
Playing hide and seek
![Page 48: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/48.jpg)
Never trying on a client’s shoes
Hiding from clients when investments go south
![Page 49: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/49.jpg)
Confusing technical jargon with good communication
Failing to take responsibility
![Page 50: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/50.jpg)
T O P ST O P S
Trust
OpportunityPS
ainolution
![Page 51: FINANCIAL PLANNING](https://reader036.fdocuments.us/reader036/viewer/2022062422/56813d64550346895da73b14/html5/thumbnails/51.jpg)
End of This Part