To help the client determine how they can meet their personal goals through the proper management of their financial resources.
Why be a financial planner instead of a stockbroker or accountant?
Financial planners take the “big picture” view of a persons financial situation and make recommendations based on the clients needs in such areas as:
Budgeting , Savings, Taxes, Investments, Insurance, and Retirement and Estate Planning
Purpose of Financial Planning (continued)
What does Financial Planning entail?
The responsibility of the financial planner is to:
1. Establish and define the client-planner relationship
2. Gather client data, including goals
3. Analyze and evaluate the client financial status
4. Develop and present financial planning recommendations and/or alternatives
5. Implement the financial planning recommendations
6. Monitor the financial planning recommendations and re-evaluate as necessary
Structure of a Financial Planning Firm
What is the structure of a financial planning firm?
While there are many different types, major divisions might include:
Budgeting and Debt Reduction
Advice and analysis on proper budgeting and savings and debt reduction strategies and help
Investments and Research
Advice and analysis on financial assets, asset allocation, and security selection
Structure of a FP Firm (continued)
Advice and analysis on using insurance products to achieve your financial goals
Retirement and Estate Planning
Advice and analysis on retirement and estate planning to help individuals achieve their goals and minimize taxes
Financial planning is a process, not a product.
While it can be performed in conjunction with providing financial products, it can also be a distinct and separate part of the practice.
How are Financial Planners Paid?
Financial planners are generally compensated in four different ways:
1. Fee based. Some charge a specific fee for their services on a per-hour or per-project basis
2. Assets under management. Some charge a percentage of the value of the client's assets under management
3. Commissions. Some receive commissions from investment or insurance companies for products sold.
4. A combination of fees and commissions, and even a salary if they work for a financial company.
Financial Planners must disclose their method and source of income to their clients.
D. Jobs in Financial Planning
Where are the jobs in Financial Planning?
Most financial planning professional either work for themselves or take positions with:
· Banks · Financial planning organizations · Life insurance companies · Accounting or law firms · Stockbrokerage and securities brokers · Mutual Fund managers · Credit counseling organizations · Large companies to look after employee benefits
What does it take to be a Successful Financial Planner
What are the key skills for a financial planner?
FPs have good counseling skills and are driven by a genuine desire to help other people.
FPs take a 'big picture' approach to their clients' lives. The ability to synthesize information clearly is a key skill.
Generally candidates with a background in the following areas stand a better chance at being successful:
Counseling, Accountancy, Law, Insurance,· Investments, and Finance
The Financial Planner (continued)
What are the skills gained as a Financial Planner?
A solid understanding of the key areas of personal finance
Key knowledge of debt and debt reduction strategies
Knowledge of how the Capital Markets work
A good understanding of companies and industry composition and structure
Professional presentation analysis
Some financial modeling and quantitative work
The Financial Planner (continued)
What are the major challenges of financial planners?
Most Financial Planners are paid on a transaction basis, rather than a salary
This makes smoothing income important
Personal contacts and meeting with the public are critical to success in this business
You must be willing to hear people say no, and not take it personally
These factors make this industry difficult
80% of those who start this industry leave before two years
How to Prepare for a Career in Financial Planning
How do you prepare for a career?
Understand the industry, positions, and lifestyle
This is an industry for self-starters—are you suited
Start building your contacts—meet with speakers
Get to know Financial Planners in the areas
Do well in your classes—work hard and smart
Use your time efficiently
Look to beginning your CFP program
It is looked on highly in the industry
Have a good Personal Financial Plan
Show potential employers as an example of your best work
A Career in Financial Planning
How do you spiritually prepare for a career?
Don’t get discouraged
Understand yourself and your goals
Keep your priorities in order
Obedience is the first law of Heaven--do what you should
Follow the Spirit
He is your competitive advantage--stay worthy of His help
Remember the Lord’s hand in your blessings
Always be appreciative of his blessings
Remember to share them with others
Review of Objectives
A. Understand the purpose of Financial Planning?
B. Understand the structure of a Financial Planning firm?
C. Know how financial planners are paid?
D. Know where the potential jobs are in Financial Planning?
E. Know how to prepare for a career in Financial Planning?