26 Careers in Financial Planning - FP 3Jun09.ppt

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26 Careers in Financial Planning - FP 3Jun09.ppt

  1. 1. Careers in the Investments Industry II Bryan Sudweeks, PhD., CFA Fall 2009
  2. 2. Potential Jobs in the Investments Industry <ul><li>I. Investment Banking </li></ul><ul><ul><li>Investment banking, Asset Management, Sales and Trading, Research </li></ul></ul><ul><li>II. Financial Planning </li></ul><ul><ul><li>Investment advising, Insurance, and Estate planning </li></ul></ul><ul><li>III. Corporate Finance </li></ul><ul><ul><li>Pension Fund Administration and Management </li></ul></ul><ul><li>IV. Financial Consulting </li></ul><ul><ul><li>Pension Fund Consulting </li></ul></ul>
  3. 3. II. Financial Planning <ul><li>Objectives </li></ul><ul><ul><li>A. Understand the purpose of Financial Planning </li></ul></ul><ul><ul><li>B. Understand the structure of a Financial Planning firm </li></ul></ul><ul><ul><li>C. Know how financial planners are paid </li></ul></ul><ul><ul><li>D. Know where the potential jobs are in Financial Planning </li></ul></ul><ul><ul><li>E. Know how to prepare for a career in Financial Planning </li></ul></ul>
  4. 4. A. Purpose of Financial Planning <ul><li>What is the purpose of financial planning? </li></ul><ul><ul><li>To help the client determine how they can meet their personal goals through the proper management of their financial resources. </li></ul></ul><ul><li>Why be a financial planner instead of a stockbroker or accountant? </li></ul><ul><ul><li>Financial planners take the “big picture” view of a persons financial situation and make recommendations based on the clients needs in such areas as: </li></ul></ul><ul><ul><ul><li>Budgeting , Savings, Taxes, Investments, Insurance, and Retirement and Estate Planning </li></ul></ul></ul>
  5. 5. Purpose of Financial Planning (continued) <ul><li>What does Financial Planning entail? </li></ul><ul><ul><ul><li>The responsibility of the financial planner is to: </li></ul></ul></ul><ul><ul><ul><li>1. Establish and define the client-planner relationship </li></ul></ul></ul><ul><ul><ul><li>2. Gather client data, including goals </li></ul></ul></ul><ul><ul><ul><li>3. Analyze and evaluate the client financial status </li></ul></ul></ul><ul><ul><ul><li>4. Develop and present financial planning recommendations and/or alternatives </li></ul></ul></ul><ul><ul><ul><li>5. Implement the financial planning recommendations </li></ul></ul></ul><ul><ul><ul><li>6. Monitor the financial planning recommendations and re-evaluate as necessary </li></ul></ul></ul>
  6. 6. <ul><li>Structure of a Financial Planning Firm </li></ul><ul><li>What is the structure of a financial planning firm? </li></ul><ul><ul><li>While there are many different types, major divisions might include: </li></ul></ul><ul><ul><ul><li>Budgeting and Debt Reduction </li></ul></ul></ul><ul><ul><ul><ul><li>Advice and analysis on proper budgeting and savings and debt reduction strategies and help </li></ul></ul></ul></ul><ul><ul><ul><li>Investments and Research </li></ul></ul></ul><ul><ul><ul><ul><li>Advice and analysis on financial assets, asset allocation, and security selection </li></ul></ul></ul></ul>
  7. 7. Structure of a FP Firm (continued) <ul><ul><li>Insurance </li></ul></ul><ul><ul><ul><li>Advice and analysis on using insurance products to achieve your financial goals </li></ul></ul></ul><ul><ul><li>Retirement and Estate Planning </li></ul></ul><ul><ul><ul><li>Advice and analysis on retirement and estate planning to help individuals achieve their goals and minimize taxes </li></ul></ul></ul><ul><li>Financial planning is a process, not a product. </li></ul><ul><ul><li>While it can be performed in conjunction with providing financial products, it can also be a distinct and separate part of the practice. </li></ul></ul>
  8. 8. <ul><li>How are Financial Planners Paid? </li></ul><ul><li>Financial planners are generally compensated in four different ways: </li></ul><ul><ul><li>1. Fee based. Some charge a specific fee for their services on a per-hour or per-project basis </li></ul></ul><ul><ul><li>2. Assets under management. Some charge a percentage of the value of the client's assets under management </li></ul></ul><ul><ul><li>3. Commissions. Some receive commissions from investment or insurance companies for products sold. </li></ul></ul><ul><ul><li>4. A combination of fees and commissions, and even a salary if they work for a financial company. </li></ul></ul><ul><li>Financial Planners must disclose their method and source of income to their clients. </li></ul>
  9. 9. D. Jobs in Financial Planning <ul><li>Where are the jobs in Financial Planning? </li></ul><ul><ul><li>Most financial planning professional either work for themselves or take positions with: </li></ul></ul><ul><ul><ul><li>· 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 </li></ul></ul></ul>
  10. 10. <ul><li>What does it take to be a Successful Financial Planner </li></ul><ul><li>What are the key skills for a financial planner? </li></ul><ul><ul><li>People skills </li></ul></ul><ul><ul><ul><li>FPs have good counseling skills and are driven by a genuine desire to help other people. </li></ul></ul></ul><ul><ul><li>Analytical skills </li></ul></ul><ul><ul><ul><li>FPs take a 'big picture' approach to their clients' lives. The ability to synthesize information clearly is a key skill. </li></ul></ul></ul><ul><ul><li>Generally candidates with a background in the following areas stand a better chance at being successful: </li></ul></ul><ul><ul><ul><li>Counseling, Accountancy, Law, Insurance,· Investments, and Finance </li></ul></ul></ul>
  11. 11. The Financial Planner (continued) <ul><li>What are the skills gained as a Financial Planner? </li></ul><ul><ul><li>A solid understanding of the key areas of personal finance </li></ul></ul><ul><ul><li>Key knowledge of debt and debt reduction strategies </li></ul></ul><ul><ul><li>Knowledge of how the Capital Markets work </li></ul></ul><ul><ul><li>A good understanding of companies and industry composition and structure </li></ul></ul><ul><ul><li>Professional presentation analysis </li></ul></ul><ul><ul><li>Some financial modeling and quantitative work </li></ul></ul>
  12. 12. The Financial Planner (continued) <ul><li>What are the major challenges of financial planners? </li></ul><ul><ul><li>Most Financial Planners are paid on a transaction basis, rather than a salary </li></ul></ul><ul><ul><ul><li>This makes smoothing income important </li></ul></ul></ul><ul><ul><li>Personal contacts and meeting with the public are critical to success in this business </li></ul></ul><ul><ul><ul><li>You must be willing to hear people say no, and not take it personally </li></ul></ul></ul><ul><ul><li>These factors make this industry difficult </li></ul></ul><ul><ul><ul><li>80% of those who start this industry leave before two years </li></ul></ul></ul>
  13. 13. <ul><li>How to Prepare for a Career in Financial Planning </li></ul><ul><li>How do you prepare for a career? </li></ul><ul><ul><li>Understand the industry, positions, and lifestyle </li></ul></ul><ul><ul><ul><li>This is an industry for self-starters—are you suited </li></ul></ul></ul><ul><ul><li>Start building your contacts—meet with speakers </li></ul></ul><ul><ul><ul><li>Get to know Financial Planners in the areas </li></ul></ul></ul><ul><ul><li>Do well in your classes—work hard and smart </li></ul></ul><ul><ul><ul><li>Use your time efficiently </li></ul></ul></ul><ul><ul><li>Look to beginning your CFP program </li></ul></ul><ul><ul><ul><li>It is looked on highly in the industry </li></ul></ul></ul><ul><ul><li>Have a good Personal Financial Plan </li></ul></ul><ul><ul><ul><li>Show potential employers as an example of your best work </li></ul></ul></ul>
  14. 14. A Career in Financial Planning <ul><li>How do you spiritually prepare for a career? </li></ul><ul><ul><li>Don’t get discouraged </li></ul></ul><ul><ul><ul><li>Understand yourself and your goals </li></ul></ul></ul><ul><ul><li>Keep your priorities in order </li></ul></ul><ul><ul><ul><li>Obedience is the first law of Heaven--do what you should </li></ul></ul></ul><ul><ul><li>Follow the Spirit </li></ul></ul><ul><ul><ul><li>He is your competitive advantage--stay worthy of His help </li></ul></ul></ul><ul><ul><li>Remember the Lord’s hand in your blessings </li></ul></ul><ul><ul><ul><li>Always be appreciative of his blessings </li></ul></ul></ul><ul><ul><ul><li>Remember to share them with others </li></ul></ul></ul>
  15. 15. Review of Objectives <ul><li>Do you: </li></ul><ul><ul><li>A. Understand the purpose of Financial Planning? </li></ul></ul><ul><ul><li>B. Understand the structure of a Financial Planning firm? </li></ul></ul><ul><ul><li>C. Know how financial planners are paid? </li></ul></ul><ul><ul><li>D. Know where the potential jobs are in Financial Planning? </li></ul></ul><ul><ul><li>E. Know how to prepare for a career in Financial Planning? </li></ul></ul>

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