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1. FINANCIAL PLANNING RECOMMENDATION
Basis
Date
: Joint Financial Planning Recommendation
: 20-Jan-2018
John J Sample
&
Mary M Sample

2. Disclaimer
Figures stated in the attached report are based on assumptions and information provided by
you, the client. These assumptions and information will change over time. Some of the
information presented is based on current tax and legislation which are subject to change.
Hence, it is imperative that you review your financial plan regularly to ensure it is
up-to-date and addresses your current needs. This report is accurate to the extent of the
information that you have provided. Information provided in the attached report is general in
nature and should not be construed as providing legal, accounting and/or tax advice. Should
you have any specific questions and/or issues in these areas, please consult your legal, tax
and/or accounting advisor.
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3. Contents
Section One :
Personal Data
Disposable Monthly Income
Net Worth
Summary of your Existing Provision
Your Monthly Income Allocation
Value of Your Financial Investments and Insurance
Your Financial Planning Priorities
General Findings
Section Two :
Contingency Funds
Retirement Savings
Life Cover
Health Insurance
Personal Accident Insurance
Regular Savings & Investments
Lump Sum Indemnity
Domestic Insurance
Estate Planning
Conclusion :
Conclusion
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4. SECTION ONE: PERSONAL DATA
Age Next Birthday :39
Marital Status :Married
Number of Children :2
Occupation :Marketing Manager @ XYZ Ltd
John J Sample,
P.O.Box 1234-00200,
Nairobi.
Dear John,
RE: YOUR FINANCIAL PLANNING RECOMMENDATION
Thank you for choosing Citidell as your private financial planning adviser. Citidell offers
comprehensive private financial planning advice to individual and corporate clients. Our
expert advice and partnership with leading local and international financial services providers
ensures that our clients experience world class financial planning services.
Citidell is licensed and regulated by CMA and IRA. We look forward to delivering great
service and a long term relationship with you.
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5. Your Disposable Monthly Income
Monthly Income
Principal Net Salary
Spouse Net Salary
Other Regular Income
Total Monthly Income
Monthly Cash Flow
Housing Expenses
Living Expenses
Loan Repayments
Savings Investsment and Insurance
Total Monthly Cash Flow
Disposable Monthly Income
Your Net Worth
Assets Owned
Cash
Financial Investments
Real Estate
Motor Vehicle(s)
Total Assets
Liabilities
Mortgage
Outstanding Loans
Total Liabilities
Net Worth
286,000.00
0.00
0.00
92,000.00
89,000.00
48,000.00
37,000.00
4,120,000.00
5,870,000.00
17,000,000.00
3,300,000.00
Painting 110,000.00
5,600,000.00
1,200,000.00
286,000.00
20,000.00
30,400,000.00
23,600,000.00
(266,000.00)
(6,800,000.00)
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6. Summary of Your Existing Provision
Existing Provision Institution
Contingency Funds BBK, Britam, NIC
Retirement Savings XYZ Ltd
Life Insurance ICEA, UAP
AARHealth Insurance
Personal Accident Insurance AAR, ICEA, UAP
Regular Savings & Investements XYZ SACCO
Lump Sum Investments Kengen, Safaricom
Domestic Insurance Nil
NilEstate Planning
Your Monthly Income Allocation
Monthly Income Allocation Recommended You (%) Action Required
Housing Expenses
Debts
Living Expenses
Savings Investment & Insurance
Retirement Savings
Total
30%
20%
30%
10%
10%
100%
32.17
16.78
31.12
5.94
6.99
100.00
Reduce to 30%
None
Reduce to 30%
Increase to 10%
Increase to 10%
Disposable Income 6.99 Invest this amount.
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7. Your Financial Investments & Insurance
Value to DateCritical Illness
Cover
Personal
Accident Cover
Last ExpenseSum AssuredLump Sum
Investments
InstitutionPlan Name
Bank Account
BBK - - - - - 3,000,000Current Account
NIC - - - - - 120,000Savings Account
Health Insurance
AAR - - 100,000 - - -Group Health
Life Cover
ICEA - 3,000,000 50,000 - - 480,000Life Cover
UAP - 9,600,000 75,000 - 500,000 -Group Life Cover
Lump Sum Investments
Safaricom 170,000 - - - - 170,000Shares
Kengen 120,000 - - - - 120,000Shares
Personal Accident Cover
UAP - - 75,000 4,800,000 - -Group Personal Accident
Retirement Savings
XYZ Ltd - - - - - 4,500,000Pension
SACCO
XYZ SACCO - - - - - 600,000
Unit Trust & Mutual Funds
Britam - - - - - 1,000,000Money Market Fund
290,000 12,600,000 300,000 4,800,000 500,000 9,990,000Total
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8. Financial Planning Priorities
þ Save and Invest for your retirement
¨ Financial security for your family
¨ Make additional savings and investments for future financial independence
þ Save and Invest for your children’s education
¨ Raise business capital
¨ Buy or build your own house
General Findings
From my assessment of your existing provision, I find that you have made good effort in
providing financial security for your family. However, your existing provision is still limited
may not be sufficient for meeting your family's future financial needs.
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9. Contingency Funds
This is your personal emergency fund. Sometimes life presents us with situations that
require substantial sums of money to be raised within a very short time. Sudden job losses,
house fires, theft of your valuables, accidents and police bonds are some examples. It is
advisable that you keep three to six months of your monthly income within easy access like
in a savings account or a money market fund.
A contingency fund is important for the following reasons:
a) You will be able to handle and manage emergencies that may arise in the course of
your life.
b) You will be able to mitigate the overwhelming effects of an emergency.
c) You will have peace of mind.
SECTION TWO: RECOMMENDATIONS
You have 2,747,200.00 excess funds in your contingency fund. You should consider
investing these funds in proper financial investments that will yield better returns for you.
Retirement Savings
A pension plan is a savings plan which provides retirement income. You have to contribute
to your pension fund during your working years before retirement for your pension fund to
provide income in your retirement. It is wise to contribute to towards your pension whether
it is through your employer’s pension scheme or through your private arrangement. The
earlier you start the better as your pension fund will benefit from the power of
compounding which can deliver some awesome growth to your retirement savings.
The main benefits of having a pension plan are as follows:
a) You will be assured of receiving an income in your retirement.
b) You will have peace of mind in your retirement.
c) You will have a better chance of living a long life.
You are currently contributing 6.99% of your regular income into your retirement plan
which is below your recommended rate of contribution. The recommended proportion of
your regular income that you should be contributing towards your retirement plan is 10 –
15 %.
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10. It is not easy to discuss death. Nevertheless, it is the destiny of all mankind. A life
Insurance cover will provide replacement income for your family in the event that you are
not able to physiologically meet your financial obligations. It gives you an opportunity to
plan and meet your financial obligations to your family when you are gone.
Usually, a sum assured, which is the cash value that will be paid out to your beneficiaries in
the event of your early demise, is determined. Your recommended sum assured is that
amount which is sufficient to clear all your outstanding debts and provide for your family’s
future financial needs, at the current living standards, until that time when your youngest
dependent is expected to be financially independent. Your life insurance company should
advice you on your monthly, quarterly, half yearly or annual cost of your life insurance
cover.
The following benefits can be added to your life cover as enhancements
§ Critical Illness Cover: It will pay a lump sum (portion of the sum assured) should
you be diagnosed with a covered terminal illness.
§ Disability Cover: Will pay a lump sum in the event of your permanent and total
disability.
§ Accidental Death Benefit: It will increase your life cover proceeds to your next of
kin by the value of the accidental death benefit cover in the event of your accidental
death.
The following are the main benefits of having a life cover:
a) A life cover will alleviate the financial strain that may befall your family in the event
that you are not physiologically able to meet your financial obligations.
b) Your family’s living standard will be maintained even when you are gone.
c) You will be able to protect your family from the burden of your debts when you are
gone.
d) You will be able to give your children a fair chance at life.
Life Insurance
The sum assured of your life insurance cover is 12,600,000.00 which is not adequate
provision for your family’s future financial needs. It has a short fall of 37,796,000.00. You
need to purchase more life insurance cover to bridge the short fall.
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11. Health Insurance
A health Insurance cover will provide insurance for hospital inpatient and outpatient bills that
either you or any of your family members may incur in the event of illness or accident
hospitalization. This is a very important cover to have as it will protect the assets that you
have accumulated over the years from adverse medical bills. You should ensure that your
health cover is in place, whether it is through your employer or through your private
arrangement.
It is also advisable to ensure that you contribute to your national hospital insurance fund as
most private health Insurance providers will settle your hospital bills less any national
hospital insurance rebate.
The main benefits of having a health cover for yourself and your family are:
a) Protect assets that you have used years to accumulate from adverse medical bills.
b) Provide quality healthcare to yourself and your family.
c) You will have peace of mind.
You currently have health Insurance from AAR which should be sufficient insurance for
your family's hospital bills.
Personal Accident Cover
A personal accident insurance cover will provide cash compensation and to some extent
cover your medical bills in the event of temporary or permanent disability or permanent and
total disability or death arising out of an accident. The limit of cover can be a multiple of
your annual income or can be determined by some arbitrary method that can be justified.
Once your limit of cover has been determined, your insurance company will advise you on
your annual premium.
This cover is important for you and your family as an accident can render you or any
member of your family incapable of engaging in your normal occupation or any other
economic activity. It is therefore advisable that you ensure that you have a personal
accident insurance cover for yourself and family whether it is through your employer or
through your private arrangement.
The main benefits of having a personal accident cover are:
a) In the event you become permanently disabled as a result of an accident, a scale of
benefits relative to the extent of disability is payable, while in the event of death, the
maximum benefit under the policy will be paid out to your next of kin.
b) You will receive replacement income for those days that you will not able to work
because of injuries sustained in an accident.
c) You will be able to alleviate the financial strain caused by personal accidents or
accidents involving any member of your family.
d) You will get cover for some medical expenses following an accident.
You currently have personal accident insurance cover that should take care of your
financial and some medical expenses in the event of an accident.
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12. Regular Savings & Investments
Great accomplishments begin with a dream and a journey of many miles is covered step by
step. A regular savings and investment plan is a sure way of achieving your medium term
and long term goals.
Goals like:
§ Retirement planning
§ Additional savings
§ Planning for your children’s education
§ Raising business capital
§ Buying or building your own house
§ Vacation or holiday planning
can easily be achieved through a regular savings and investment plan. Offshore investments
are particularly superior because of their flexibility, diversity, stringent regulatory
environment and they give you the opportunity to invest in the fastest growing economies of
the world.
You stand to benefit from the following by having a regular savings and investment plan:
a) It will instill and enhance the discipline of saving money in you.
b) You will earn returns on your invested savings.
c) You will set yourself on the path to achieving your goals.
You have regular disposable income of 20,000.00 per month which you can commit to an
additional regular savings investment plan.
Lump Sum Investments
Fund managers have experience in financial markets which can benefit your investment.
They also have various investments which are tailored to meet different investor’s objectives
like capital preservation, capital growth, a mix of capital growth and capital preservation or
income generation.
Offshore investments are particularly superior because of their diversity, stringent regulatory
environment and they give you the opportunity to invest in the fastest growing economies of
the world.
You stand to benefit from the following by investing your surplus funds with a professional
fund manager.
a) You will get professional and experienced investment management service.
b) You will easily diversify your portfolio without necessarily going through the hustles of
performing several individual transactions.
c) You will benefit from low cost of investment.
d) Potential high returns from your investment.
You have 2,060,800.00 excess funds in your contingency fund which you can apply to
more lump sum investments.
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13. Domestic Insurance
This insurance cover is designed especially for your residence. It is arranged to cater for
almost everything you have worked hard for in your household including the buildings,
furniture, clothing, kitchen equipment, cutlery, electronics, domestic servants (indoor and
outdoor) sports equipment among others. The policy extends to include your personal
liability either as an owner or an occupier of the premises to third parties, for damage to
third party property, bodily injury or death to third parties arising out your use of the
premise.
Scope of cover includes; fire, theft, accidental damage, liability to third parties and
occupational accidents to servants including your liability as an employer. Cover can be
arranged on buildings only, contents only or for both buildings and contents.
The main benefits of having domestic insurance include:
a) Protect your existing provision from uninsured risks in your household.
b) You will be able to mitigate overwhelming effects of accidents or other unfortunate
incidents that occur in your house.
c) You will be compensated for losses arising out of insured risks in your household.
You need to purchase a domestic insurance cover to protect your household assets from
uninsured risks.
Estate Planning
A person’s estate consists of all the personal belongings, assets, business holdings, and
financial resources an individual owns. An estate can include real property, chattel,
possessions, investments, interests in a corporation, rites from a law suit or structured
settlement, or funds in the person’s name, held in partnerships or joint ventures, through a
trust, or joint ownership arrangement. Estate planning is the process of accounting for the
accumulated assets of your estate and arranging for the distribution of those assets in order
to achieve your wishes - writing your will.
The main benefits of having a will include:
a) Having a will is important because it enables you to distribute your estate to your
desired beneficiaries when you are gone. Otherwise, some of your assets may remain
unclaimed and your estate will be distributed as per someone else’s wishes not to
mention the potential for conflict amongst your next of Kin.
b) It will facilitate an orderly succession by your next generation.
c) You will be able to choose the following important people who will be involved in your
estate: executor, trustee, administrators, guardian, beneficiaries and delegate
financial power of attorney and medical power of attorney.
It is prudent that you write your will otherwise your assets will be distributed as per
someone else’s wishes or some of your assets may even go unclaimed.
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14. Conclusion
Implementing these financial planning recommendations will set you firmly on the path to
achieving your goals in life.
I trust that you will find this financial planning recommendation insightful and I look forward
to having further discussions with you. Please do not hesitate to get in touch with me in case
you need further clarification.
Financial Planning Adviser
Citidell Co. Ltd
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