In this article I would like to emphasise what to expect in terms of Financial Planning and will be referring to it as FP and to Financial Advice as FA. There is such a great need amongst people for FA, but often they end up with a product that is being marketed to them, and their questions regarding FA are never answered. For the purposes of this article I will be concentrating on the individual.
The need for FA arises in most cases when people enter the labour market, start a new venture, when they lose a family member or somebody known to them, when a friend is disabled in an accident, or diagnosed with a dread disease etc to mention a few examples. It is usually a good reason to take out a policy, but the policy is just like an anti-biotic for a sick person, it does not cure the cause of the illness, it only heals what is ailing at that time.
There are many role players who offer FA such as an Auditor or a Tax Practitioner, a Lawyer, an Estate Agent, a Bank Manager or Relationship Manager, Fund or Asset Managers, etc and also Brokers and Insurance Agents. The quality of the advice depends largely on the qualifications and experience of the advice-giver and the infrastructure available to control and monitor the Financial prosesse that are put in place.
The person that earns an income needs taxation advice from their auditor or a Tax Practitioner to ensure that they use their income in the best manner possible to their own advantage, a Lawyer to, for example, take care of their will, their pre-nuptial contract and the transfer of their property, an estate agent to provide advice around the buying and selling of property, a Bank Manager to look after their banking affairs, a Fund Manager to ensure that their investments grow, and a broker or agent where they can take out policies and investments.
The problem is however that every individual goes through phases in their life and the FA mentioned above must be monitored and adjusted annually to fit to the individual’s changing circumstances, otherwise the planning means very little, and conversely it can be to the individual’s disadvantage rather than to their advantage because of the changed circumstances. Your Financial Plan must thus be reviewed and adjusted at regular intervals, at least annually.
Certified Financial Planners (abbreviated as CFP®) possess a Post Graduate Diploma in Financial Planning that is recognised in 44 countries around the globe and they are specifically trained to perform comprehensice FP that includes tax advice, risk planning, will and trust planning, investment planning, banking and budget management, corporate planning, property transaction planning, etc and most important of all, the Financial care of you and your family, and to monitor and adjust the processes put in place on a regular basis.
Financial success is only realised through timely professional financial planning, but the responsibility of getting it done remains with the individual.