Anupama Nair
www.mediaeyenews.com
What is financial planning. “Financial planning is the process of managing your finances in line with your life goals”. What are ‘life goals’. Life goals can include buying a home, managing your family’s welfare, saving for education of your child, or planning for your retirement. “Financial planning involves gathering your financial information, setting life goals, examining your current financial status and coming up with a strategy or plan for how you can meet your goals given your current situation and future plans and reviewing this on an ongoing basis”.
First of all you need to determine whom you should consult for financial planning. There are many different financial advisors including — an Independent Financial Advisor (IFA), a Life Assurance Agent, a Financial Advisor from a Bank, an Accountant, and an Attorney or a lawyer. While you can seek help from any number of people, only Registered Financial Service Providers (FSP’s) are able to give formal advice and they are regulated and need to follow strict planning and advice guidelines. It is therefore, recommended that everyone use proper qualified and professional guidance from an authorized financial services provider who will be able to construct a portfolio of investment and insurance suited to their individual needs and affordability, while taking into account the provisions enjoyed under their Employer’s arrangements for them.
If you are dealing with an independent financial advisors, it offers a degree of:
· Independence is not tied to any one institution;
· Objectivity is not product driven instead focus on the Financial Plan;
· Professionalism can elect to pay fees rather than commission, or a combination of both;
· Product Choices have access to a wider range of products suitable for your needs.
The next question asked is what are aspects of financial planning? They are:
Individual financial planning: It is always wise not to view your employer’s provisions in isolation from your own individual financial planning provisions. It is therefore recommended that all members avail themselves with proper qualified and professional guidance from an authorized financial services provider, who will be able to construct a portfolio of investment and insurance suited to their individual needs and affordability, while taking into account the provisions enjoyed under their employer’s arrangements for them.
Retirement Planning: As part of such a portfolio, the financial planner should include a retirement plan that embraces both the employer-sponsored retirement funding as well as the individual arrangements.
Retirement counseling: As people near the retirement age (three to five years ahead) it is recommended that they avail themselves of proper qualified and professional guidance from an authorized financial service provider who will provide them with details of the many options and choices that they have to consider at retirement, as well as provide them with illustrative values of their projected retirement capital and the pension income that may be derived from such capital. It should be borne in mind that each person retiring will have different circumstances and requirements at retirement.
