Introduction to financial planning

Introduction to financial planning
Presented by:
Shashikant gupta
PGDM II year
What is financial planning
financial planning is a process of taking a holistic
view of the financial needs of individuals and
offering solution to help them meet financial
goals of their life.
Financial Planning is an ongoing process to help
you make sensible decisions about money that
can help you achieve your goals in life;
Need for financial planning
everybody wants to achieve his/her desired goal
and have a secure future as well. But not
everyone is financially ready to achieve its goals
or be prepared to undertake any adversity.
those who are prepared for it are the only ones
who have planned systematically to achieve
their goals securely.
Who is a financial planner
A financial planner is a person who uses the financial
planning process to enable the client to achieve this
financial goal and better management of financial
resources of the clients
Professional financial planner is well informed and
understands the universe of various investment options
available as well as risk and return attributes of these
options.
Skills important for a financial planner.
• Technical skills
• Interpersonal skills
• Professionalism
The financial planning process of the
following six steps
1. Establish and define the client-
planner relationship.
the planning process start off with gathering the
background data and other relevant financial
information in other the implement this,
traditionally face to face meeting is carried out
this is where the personal touch comes in to
play and the opportunity to build up a client-
planner relationship
2 . Gather client data, including goals.
The financial planner should ask for information
about your financial situation. You and the
planner should mutually define your personal
and financial goals, understand your time frame
for results and discuss, if relevant, how you feel
about risk. The financial planner should gather
all the necessary documents before giving you
the advice you need.
3. Analyse and evaluate your financial
status.
The financial planner should analyse your
information to assess your current situation and
determine what you must do to meet your
goals. Depending on what services you have
asked for, this could include analysing your
assets, liabilities and cash flow, current
insurance coverage, investments or tax
strategies.
4. Develop and present financial
planning recommendations and/or
alternatives.
The financial planner should offer financial planning
recommendations that address your goals, based
on the information you provide. The planner should
go over the recommendations with you to help you
understand them so that you can make informed
decisions. The planner should also listen to your
concerns and revise the recommendations as
appropriate.
5. Implement the financial planning
recommendations.
You and the financial planner should agree on
how the recommendations will be carried out.
The planner may carry out the
recommendations or serve as your coach,
coordinating the process with you and other
professionals such as attorneys, accountants or
stockbrokers.
6. Monitor the financial planning
recommendations.
You and the financial planner should agree on
who will monitor your progress towards your
goals. If the planner is in charge of the process,
he or she should report to you periodically to
review your situation and adjust the
recommendations, if needed, as your life
changes.
Scope of financial planning
1.Investment and Planning Issues :
Planning, creating and managing capital
accumulation to generate future capital and cash
flows for reinvestment and spending, including
managing for risk-adjusted returns and to deal with
inflation
2. Cash Flow and Liability management
Management Maintaining and enhancing personal
cash flows through debt and lifestyle management
3. Retirement Planning: it aims at financial
freedom for the client after retirement, by various
savings.
4. Tax Planning :Planning for the reduction of tax
liabilities and the freeing-up of cash flows for other
purposes
5 .Estate Planning: Planning for the creation,
accumulation, conservation and distribution of
assets
6. Risk Management and Insurance:
Planning Managing cash flow risks through sound
risk management and insurance techniques
Regulatory framework
• SEBI act 1992
• The insurance ombudsman
• Consumer protection act 1986:
• Term used to describe financial services professionals
o Accountant
o CFP by FPSB
o Financial advisor
o Financial securities analyst
o Insurance agents
o Investment advisor
o Portfolio manager
o Real estate broker
o Stockbroker
Thank you
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Introduction to financial planning

  • 1. Introduction to financial planning Presented by: Shashikant gupta PGDM II year
  • 2. What is financial planning financial planning is a process of taking a holistic view of the financial needs of individuals and offering solution to help them meet financial goals of their life. Financial Planning is an ongoing process to help you make sensible decisions about money that can help you achieve your goals in life;
  • 3. Need for financial planning everybody wants to achieve his/her desired goal and have a secure future as well. But not everyone is financially ready to achieve its goals or be prepared to undertake any adversity. those who are prepared for it are the only ones who have planned systematically to achieve their goals securely.
  • 4. Who is a financial planner A financial planner is a person who uses the financial planning process to enable the client to achieve this financial goal and better management of financial resources of the clients Professional financial planner is well informed and understands the universe of various investment options available as well as risk and return attributes of these options. Skills important for a financial planner. • Technical skills • Interpersonal skills • Professionalism
  • 5. The financial planning process of the following six steps
  • 6. 1. Establish and define the client- planner relationship. the planning process start off with gathering the background data and other relevant financial information in other the implement this, traditionally face to face meeting is carried out this is where the personal touch comes in to play and the opportunity to build up a client- planner relationship
  • 7. 2 . Gather client data, including goals. The financial planner should ask for information about your financial situation. You and the planner should mutually define your personal and financial goals, understand your time frame for results and discuss, if relevant, how you feel about risk. The financial planner should gather all the necessary documents before giving you the advice you need.
  • 8. 3. Analyse and evaluate your financial status. The financial planner should analyse your information to assess your current situation and determine what you must do to meet your goals. Depending on what services you have asked for, this could include analysing your assets, liabilities and cash flow, current insurance coverage, investments or tax strategies.
  • 9. 4. Develop and present financial planning recommendations and/or alternatives. The financial planner should offer financial planning recommendations that address your goals, based on the information you provide. The planner should go over the recommendations with you to help you understand them so that you can make informed decisions. The planner should also listen to your concerns and revise the recommendations as appropriate.
  • 10. 5. Implement the financial planning recommendations. You and the financial planner should agree on how the recommendations will be carried out. The planner may carry out the recommendations or serve as your coach, coordinating the process with you and other professionals such as attorneys, accountants or stockbrokers.
  • 11. 6. Monitor the financial planning recommendations. You and the financial planner should agree on who will monitor your progress towards your goals. If the planner is in charge of the process, he or she should report to you periodically to review your situation and adjust the recommendations, if needed, as your life changes.
  • 12. Scope of financial planning 1.Investment and Planning Issues : Planning, creating and managing capital accumulation to generate future capital and cash flows for reinvestment and spending, including managing for risk-adjusted returns and to deal with inflation 2. Cash Flow and Liability management Management Maintaining and enhancing personal cash flows through debt and lifestyle management
  • 13. 3. Retirement Planning: it aims at financial freedom for the client after retirement, by various savings. 4. Tax Planning :Planning for the reduction of tax liabilities and the freeing-up of cash flows for other purposes 5 .Estate Planning: Planning for the creation, accumulation, conservation and distribution of assets 6. Risk Management and Insurance: Planning Managing cash flow risks through sound risk management and insurance techniques
  • 14. Regulatory framework • SEBI act 1992 • The insurance ombudsman • Consumer protection act 1986: • Term used to describe financial services professionals o Accountant o CFP by FPSB o Financial advisor o Financial securities analyst o Insurance agents o Investment advisor o Portfolio manager o Real estate broker o Stockbroker