Financial planning overview


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Here's that quick overview of the financial planning industry you have been looking for and it's part of the continuing series of industry overviews for anyone interested in the financial services industry.

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Financial planning overview

  1. 1. Financial Services Industry Training Introduction to Financial Planning Industry Saunders Learning Group, LLC Saunders Learning Group, LLC, Andover, KS
  2. 2. Training from Saunders Learning Group Saunders Learning Group provides a variety of training programs, workshops and seminars targeted to the financial services industry. Programs are available in a wide range of topics, and we are specialists in developing custom programs that are targeted to your needs. Contact the founder, Floyd Saunders at 316-680-6482 or at for more information. Saunders Learning Group, LLC, Andover, KS1
  3. 3. Reference Material Figuring Out Wall Street Consumer’s Guide To Financial Markets By Floyd Saunders Publisher: Saunders Learning Group ISBN: 978-0-9824019-0-3 Available from Amazon: Consumers/dp/0982401906 and many other online book stores. Book summary: Figuring Out Wall Street, is the concise guide to help everyone understand how what to do now to restore our financial systems. Written in an easy to understand manner, even the most complex financial concepts are easy to digest. This book provides help to monitor investments with a review of investment products, financial regulators and economic indicators. Learn how the stock market exchanges work and the world of investment banking, hedge funds, venture capital and private equity. Every chapter includes action plans for investing. Saunders Learning Group, LLC, Andover, KS
  4. 4. Topics1. Jobs in the Financial Planning Industry2. Purpose of Financial Planning3. Financial Planning Certifications4. Financial Planning Regulation5. Registered Investment Advisor Saunders Learning Group, LLC, Andover, KS Slide 3
  5. 5. Financial Planning Industry Creates financial plans, and typically acts to implement those plans with a varietyFunction of financial products and services. May be offered as the primary service or as part of business line.  Prospecting clients (usually through "cold calling")  Collects information to prepare a financial plan  Prepares a financial plan for client  Works with client to implement the plan with a variety of financial products and servicesExample  May work with other professionals on specialized or unique planning andactivities financial needs  Networks with other professionals to acquire new clients  Inform the client of new products (such as different types of insurance or annuities) that the company is offering that could be useful in attaining certain financial goals  Managements investments on behalf of the client  Meets for annual or periodic reviews of financial plan vs. goals.  Most banks, brokerage firms, insurance companies and mutual funds offer Example some sort of financial planning service or practice.Companies  Fee only financial planners are typically smaller firms. Saunders Learning Group, LLC, Andover, KS Slide 4
  6. 6. 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 Saunders Learning Group, LLC, Andover, KS
  7. 7. 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 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  Retirement planning  Estate Planning Saunders Learning Group, LLC, Andover, KS
  8. 8. Purpose of Financial PlanningThe responsibility of the financial planner is toestablish a client-planner relationship and: 1. Gather client data, including goals and objectives 2. Analyze and evaluate the client financial status 3. Develop and present financial planning recommendations and/or alternative 4. Implement the financial planning recommendations 5. Monitor the financial planning recommendations and re-evaluate as necessary Saunders Learning Group, LLC, Andover, KS
  9. 9. What is a “financial planner”? The term, financial planner, is a broad and can apply to a number of different financial professionals. Almost any life/annuity agent or securities representative can will refer to themselves as a financial planner, regardless of their licensing, certifications, education, experience or their product specialization. Agents and reps are commonly referred to as financial planners by the industry and the media. So the term “financial planner” is non-specific and widely used inside and outside the financial planning industry, and generally refers to anyone who is licensed to sell in any part of the financial planning industry. Saunders Learning Group, LLC, Andover, KS Slide 8
  10. 10. Financial Planning certifications A number of certification are available to designate a planner with “credentials” indicating education, experience and adherence to a set of professional ethics. This normally entitles the professional to use the initials of the certification at the end of their name, on their business cards, letterhead, advertising materials, etc.  For example, John Doe, CLU, CFP®. Professional Certifications include: Chartered Life Underwriter (CLU) Chartered Financial Consultant (ChFC) Certified Financial Planner (CFP®) Registered Financial Consultant (RFC) Certified Senior Advisor (CSA) Saunders Learning Group, LLC, Andover, KS Slide 9
  11. 11. Financial Planning Regulation The financial planning industry, life insurance/annuities and securities industries are heavily regulated. Insurance/annuity sales are regulated primarily by each state Securities sales are regulated by both state securities commissions and the federal government (SEC, primarily through the NASD). Saunders Learning Group, LLC, Andover, KS Slide 10
  12. 12. Registered Investment AdvisorAn important sub-segment of the securities industry is the “registered investmentadvisor” or “registered investment advisory firm”, both generally known as RIA. RIAs operate under securities laws, but work a little differently than registered reps. Rather than earning commissions from the sale of securities, they charge their clients flat fees or fixed percentages for managing the clients’ money or doing the investment planning for the client. These fees may be a percentage of the money under management for a given client, say 1.5% per year of the total client money under management, may be hourly, or may be a combination of both. Either way, this is called “fee based planning” or “fee only planning”. Fee based or fee only planning is a common term which RIAs use to describe their services. The advantage for the client is that the RIA will not be tempted to sell the client a security solely to generate a commission. Saunders Learning Group, LLC, Andover, KS Slide 11
  13. 13. Overview Of Financial Planning Sales Network Most broker dealers either own a life insurance company or the BD is owned by a life insurance company. A life insurance company and Broker Dealer must be maintained as separate companies. Each sales person maintains their life insurance securities licenses. Securities sales are handled through the Broker Dealer and life insurance sales handled through the life insurance company. Most major life insurance companies have their own sales office network, and these offices are called “general agencies”. The person in charge of the general agency is called the “general agent”. In addition to the individual agents being independent, commission based contractors, the general agent is also commission based. Some examples of these types of companies are: Prudential, Metropolitan, Lincoln, and Massachusetts Mutual. Saunders Learning Group, LLC, Andover, KS Slide 12
  14. 14. 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  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. Saunders Learning Group, LLC, Andover, KS
  15. 15. Questions Saunders Learning Group, LLC, Andover, KS
  16. 16. Post Workshop Action Plan  Complete the Post Workshop Action Plan Saunders Learning Group, LLC, Andover, KS15
  17. 17. Thank You !Saunders Learning Group, LLCSaunders Learning Group, LLC, Andover, KS
  18. 18. About the Author/Presenter  Floyd Saunders has worked on Wall Street with both Bank of America and JPMorgan, where is was a vice president in global financial systems. He has worked across the industry in retail, commercial, and investment banking.  He has taught courses in Money and Banking and extensively for the American Institute of Banking and various colleges.  As a consultant, he developed and taught a wide range of banking and investing courses.  He authored three programs for the American Bankers Association: Banking on Mutual Funds and Annuities, Introduction to Securities Markets and Investing in Securities.  He is the author of “Figuring Out Wall Street” and his next book is “Family Financial Freedom” a book on personal money management. Saunders Learning Group, LLC, Andover, KS