Financial Planning

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Financial Planning
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Financial Planning ??

• Financial Planning is the process of meeting your
  life goals through proper management of your
  finances.
• Goals may include buying a house, business setup,
  higher education of children, retirement planning
  etc.
• Financial Planning provides direction meaning
  to the financial decisions. It helps to evaluate
  the impact of financial decisions on other areas.

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Financial Planning Overview

• Need for Savings
• To fight / hedge against inflation
• Growing dependency on savings with time
• Meet the goals / objectives of life

• Three Rs of Money
• Reality money is limited
• Responsibility use it wisely
• Restraint think of Future

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Why Plan ?? Life Cycle of Client
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Why Financial Planning ??

• Multiple goals / needs / desires
• Limited resources at disposal
• Increased uncertainty and complexity in life
• Increased complexity in investments and presence
  of multiple products

Financial Independence / Self Reliance / Peace of
Mind
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Financial Planning Services

• As Wealth Managers you offer Financial
• Planning services to your clients
• A real financial advisor
• Value-added Differentiated services to the
  clients
• Additional business mobilisation
• Customer Acquisition
• Customer Loyalty retention
• Differentiation Branding
• Customer References

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Financial Planning Scope
Inheritance Planning
Capital Management
Charity Planning
Life Insurance
Cash Flow / Budgeting
Non-Life Insurance
Liability / Credit Planning
Investment Planning
Risk Management
Tax Planning
Goal Planning
Disability Planning
Retirement Planning
Business Capital Planning
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Risk Profiling

• Every person has a unique personal, family and
  financial situation. Their decisions depends on
  this uniqueness.
• Each investment is coupled with certain risk
  element and each person responds to risk
  differently.
• The amount of risk a person is willing to take
  depends on several factors such as his age,
  education, income, number of dependants,
  personal/ family goals and his mental attitude
  towards money.
• The mental tolerance of a person in his mid-30s
  with a working wife and a kid would be much
  higher than a person who is retired and has
  dependant wife and aged parents. Hence, judging
  the risk tolerance of a client is an important
  step in financial planning.

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Risk Profiling

• Risk tolerance is the risk-taking ability of an
  individual.
• Risk Profiling is a method used for
  determination of risk tolerance of an individual.
• Risk Profiling includes a questionnaire with
  weights attached to the answers selected. The sum
  of weighted answers shows the risk tolerance of
  the client.
• Chief determinants of Risk Profile are
• Age Group younger the person, higher risk
  taking
• Investment horizon higher risk for long term
  plans (LIC)
• Purpose of investment capital growth, regular
  income etc
• Volatility market fluctuations affect investor
  behaviour

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Financial Planning Process
Financial planning is the process of establishing
personal and financial goals and creating a way
to reach them
Establishing Defining Relationship
Data Collection, including goals
Evaluation Preparation of Plan
Presenting Finalizing Plan
Recording / Implementation of Plan
Regular Monitoring
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Financial Planning Skills

• Traits
• Trust
• Knowledge
• Products options
• Tax estate planning
• Understanding Life Wealth cycles
• Judgment
• Balanced thinking
• Organised
• Relationship building
• Focus on Financial well-being of client

• Principles
• Integrity
• Objectivity
• Competence
• Fairness
• Confidentiality
• Professionalism
• Diligence
• Compliance
• Terminology