26 Careers in Financial Planning - FP 3Jun09.ppt
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26 Careers in Financial Planning - FP 3Jun09.ppt Presentation Transcript

  • 1. Careers in the Investments Industry II Bryan Sudweeks, PhD., CFA Fall 2009
  • 2. Potential Jobs in the Investments Industry
    • I. Investment Banking
      • Investment banking, Asset Management, Sales and Trading, Research
    • II. Financial Planning
      • Investment advising, Insurance, and Estate planning
    • III. Corporate Finance
      • Pension Fund Administration and Management
    • IV. Financial Consulting
      • Pension Fund Consulting
  • 3. II. Financial Planning
    • 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
  • 4. A. Purpose of Financial Planning
    • What is the purpose of financial planning?
      • 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
  • 5. 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
  • 6.
    • 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
  • 7. Structure of a FP Firm (continued)
      • Insurance
        • 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.
  • 8.
    • 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.
  • 9. 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
  • 10.
    • What does it take to be a Successful Financial Planner
    • What are the key skills for a financial planner?
      • People skills
        • FPs have good counseling skills and are driven by a genuine desire to help other people.
      • Analytical skills
        • 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
  • 11. 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
  • 12. 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
  • 13.
    • 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
  • 14. 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
  • 15. Review of Objectives
    • Do you:
      • 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?