Financial planningRichard Allum CFP APP
Those that can’t see thefuture.....
Those that can’t see theycan’t see the future…
“A professional service forclients who need objectiveassistance in organising theirfinancial affairs to achievetheir finan...
Is cash flow         planning compulsory?Institute of Financial Planning
Lifetime planningEstate planningSavings strategies
Investment riskShortfallsGetting real
Creating ways to helppeople make more senseof money
Framing  ContextEngagement
“Financial plansare worthless”
“The process ofplanning is invaluable”
Planning process1. Establish goals & objectives2. Gather data3. Analyse information4. Develop plan5. Implement plan6. Moni...
Things in common1. Clear service proposition2. Platform & investment process3. Agendas4. Questionnaires5. Team approach6. ...
Data, objectivesand assumptions
“One of the keys to successfulfinancial planning is learning tolet go of precision.”Carl Richards @behaviorgap
No objectives..no plan!• Clear & concise• Prioritised• Timescales• Agreed & written down• Reviewed regularly
Financial objectives• Increase my spendable income• Pay less tax• Improve retirement income• Increase investment returns• ...
Emotional objectives• Increase my financial security• Achieve financial independence• Safeguard my family• Understand more...
As a minimum maintain thelifestyle I want under anycircumstances however longI live
Key phrases• So what?• Why?• What would need to happen for...?• Can you afford to do the things you want?• Do you have eno...
Assumptions• Inflation• Earnings growth• Investment returns• Tax• Mortality• Capital conversion
Real value of moneyAssumption     Notional   RealNAE              4.5%     1.5%Savings          2.0%     -1.0%Investments ...
AssumptionsIn principle, simply as a planningassumption.....If you can’t fault the assumptions, it’sreasonable to accept t...
Net worthAsset                ValueProperty             £500,000Cash savings         £68,000Investments          £142,000B...
Liquidity ratio                  Cash & investments        21%                  £210,000
BudgetSource              Amount per monthFixed expenses      £2,150Variable expenses   £1,100Total expenses      £3,250Gr...
Plan structure• Cohesive document• Logical progression• Language• Style & content• Action plan• Presentation options
Reviews• Essential• Review everything• Assumptions• Process• Presentation
Manage expectations
Key rolesAdviser              ParaplannerLeads relationship   Gathers dataPresents plan        AnalysisProvides advice    ...
“A poor financial planner is         a poor financial planner”David Norton
Cash flow planning
Show client.....• If on target• What return is needed?• How much more ..... is needed?• When (or if) they can stop work• H...
Making sure you don’t runout of money!
Multiple scenarios• If all goes to plan• Someone dies• Serious illness• Retire early• Sell business.....
Risk profiling
A solution• Robust, repeatable process• In-depth discussion• Full understanding of risks• Don’t rely on risk profile tools...
Investor behaviour
“We took risks, we knew we took   them; things have come out against   us, and therefore we have no cause   for complaint....
Cash flow tools
The market
The market
Calculators
Excel
Calculators
Goal seek
Solutions
Benefits• Better client relationships• In control• Greater fee income• Generational planning• No market moans!
Useful resources
A good read
www.moneyscopehq.com
Financial Planning for IFP London
Financial Planning for IFP London
Financial Planning for IFP London
Financial Planning for IFP London
Financial Planning for IFP London
Financial Planning for IFP London
Financial Planning for IFP London
Upcoming SlideShare
Loading in …5
×

Financial Planning for IFP London

2,074 views

Published on

Richard Allum's slides from his presentation on financial planning delivered at a meeting of the IFP in London on 1 May 2012.

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
2,074
On SlideShare
0
From Embeds
0
Number of Embeds
1,453
Actions
Shares
0
Downloads
26
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • Beginners to experts Not telling but sharing
  • Alan Dick 2 types of adviser
  • Guesses
  • NOT about products
  • Nick Cann Doesn’t have to be complicated
  • Only 3 answers to cash flow Just got enough = close monitoring Not enough (red) = risk, savings, spend less Plenty = less risk, gifts, IHT
  • Tom Cruise - Jerry McGuire Show me the money Brings money to life Might not take this approach with clients BUT it’s what they want to know
  • Guesses
  • Know - paraphrase - check understanding - record Connect - show me Am I on track or not Personal funding ratio
  • Carl Richards Behaviour Gap
  • Carl Richards Behaviour Gap
  • Talk through each & how done Share process & efficiencies
  • Before do cash flow.. Fact finding skills are different
  • Gathering data No barriers Engage client quickly
  • Question skills Needs v wants Vanguard examples Financial v emotional ....
  • Primary objective Record Livescribe
  • Main ones Linear or stochastic When will you die Source & audit trail
  • 3% inflation
  • No debts
  • Secondary ratio 7% Cash reserve Making sure always got access to £ when needed
  • Spending creep State benefits Knock on effects
  • Presentation Live dynamic
  • Bedrock of service Paraplanners drive
  • Administrator involved too
  • Charging Place a value
  • Bring money to life
  • Over reliance on tools Capacity for loss Detailed discussion with client Full understanding
  • Stop this happening What rate of return is needed?
  • Impartial! Use them all Talk about them
  • Crystal Excelsius
  • Financial Planning for IFP London

    1. 1. Financial planningRichard Allum CFP APP
    2. 2. Those that can’t see thefuture.....
    3. 3. Those that can’t see theycan’t see the future…
    4. 4. “A professional service forclients who need objectiveassistance in organising theirfinancial affairs to achievetheir financial and lifestylegoals”
    5. 5. Is cash flow planning compulsory?Institute of Financial Planning
    6. 6. Lifetime planningEstate planningSavings strategies
    7. 7. Investment riskShortfallsGetting real
    8. 8. Creating ways to helppeople make more senseof money
    9. 9. Framing ContextEngagement
    10. 10. “Financial plansare worthless”
    11. 11. “The process ofplanning is invaluable”
    12. 12. Planning process1. Establish goals & objectives2. Gather data3. Analyse information4. Develop plan5. Implement plan6. Monitor and adjust
    13. 13. Things in common1. Clear service proposition2. Platform & investment process3. Agendas4. Questionnaires5. Team approach6. Charge
    14. 14. Data, objectivesand assumptions
    15. 15. “One of the keys to successfulfinancial planning is learning tolet go of precision.”Carl Richards @behaviorgap
    16. 16. No objectives..no plan!• Clear & concise• Prioritised• Timescales• Agreed & written down• Reviewed regularly
    17. 17. Financial objectives• Increase my spendable income• Pay less tax• Improve retirement income• Increase investment returns• Pay off mortgage
    18. 18. Emotional objectives• Increase my financial security• Achieve financial independence• Safeguard my family• Understand more about my money• Give more to charity
    19. 19. As a minimum maintain thelifestyle I want under anycircumstances however longI live
    20. 20. Key phrases• So what?• Why?• What would need to happen for...?• Can you afford to do the things you want?• Do you have enough time to do them?
    21. 21. Assumptions• Inflation• Earnings growth• Investment returns• Tax• Mortality• Capital conversion
    22. 22. Real value of moneyAssumption Notional RealNAE 4.5% 1.5%Savings 2.0% -1.0%Investments 6.0% 3.0%School fees 6.8% 3.8%House prices 3.0% 0.0%
    23. 23. AssumptionsIn principle, simply as a planningassumption.....If you can’t fault the assumptions, it’sreasonable to accept theconclusions......
    24. 24. Net worthAsset ValueProperty £500,000Cash savings £68,000Investments £142,000Business interests £250,000Personal effects £50,000Pension funds £230,000Total £1,240,000
    25. 25. Liquidity ratio Cash & investments 21% £210,000
    26. 26. BudgetSource Amount per monthFixed expenses £2,150Variable expenses £1,100Total expenses £3,250Gross income £6,500Net income £4,575Disposable income £1,325Spendable income ???
    27. 27. Plan structure• Cohesive document• Logical progression• Language• Style & content• Action plan• Presentation options
    28. 28. Reviews• Essential• Review everything• Assumptions• Process• Presentation
    29. 29. Manage expectations
    30. 30. Key rolesAdviser ParaplannerLeads relationship Gathers dataPresents plan AnalysisProvides advice Prepares plan
    31. 31. “A poor financial planner is a poor financial planner”David Norton
    32. 32. Cash flow planning
    33. 33. Show client.....• If on target• What return is needed?• How much more ..... is needed?• When (or if) they can stop work• How much they can give away
    34. 34. Making sure you don’t runout of money!
    35. 35. Multiple scenarios• If all goes to plan• Someone dies• Serious illness• Retire early• Sell business.....
    36. 36. Risk profiling
    37. 37. A solution• Robust, repeatable process• In-depth discussion• Full understanding of risks• Don’t rely on risk profile tools• What return is needed?• Is any risk needed?
    38. 38. Investor behaviour
    39. 39. “We took risks, we knew we took them; things have come out against us, and therefore we have no cause for complaint.”Robert Falcon Scott
    40. 40. Cash flow tools
    41. 41. The market
    42. 42. The market
    43. 43. Calculators
    44. 44. Excel
    45. 45. Calculators
    46. 46. Goal seek
    47. 47. Solutions
    48. 48. Benefits• Better client relationships• In control• Greater fee income• Generational planning• No market moans!
    49. 49. Useful resources
    50. 50. A good read
    51. 51. www.moneyscopehq.com

    ×