Financial Planning

Financial planning deals with making decisions on money management and securing future. It assists in achieving financial goals as well as meeting personal priorities considering the available resources, risk appetite, responsibilities and lifestyle.

Financial planning handles the allocation of savings to accomplish a perfect risk-reward balance. Financial planning includes asset allocation, retirement planning, insurance planning and investment planning.

Financial planning is a tool for investors and is well-known globally. Generally, it is noted that finances are seen as a piece-meal basis. In fact, most of them invest haphazardly, save less and spend limitlessly. In this way, each investor surpasses the monthly expenses and gets into the trap of mortgage, loans on credit cards, and many more.

Avoiding all these is possible by adhering to the disciplines of financial planning and enjoying by saving, spending and investing within a frame.

Steps of financial planning

Financial planning supports in translating the objectives of each individual into specific plans and thereby implements plans, outlining the strategies. The financial planning process encompasses few steps
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• The first step of financial planning is to identify the objectives and this includes education of the children, the age the investor will retire, the things to be secured for spouse and dependents and the lifestyle for the future.

• This is followed by gathering data such as tax returns, income level, trusts, insurance policies, investments, estate planning documents and real estate. Acquiring and gathering the best detailed information helps in making accurate financial plan.

• Various alternatives have to be considered to help in meeting the investor’s financial goals and objectives.

• This is followed by formulating strategies meeting financial goals and executing this plan to see that it is put into action.

• Above all, it is important to monitor the strategies, goals and plans at regular intervals.

Role of Financial Planner

The role of financial planner is to assist the investors in finding a path to reach their financial goals and to comprehend the influence of their financial decisions. The financial planner selected to plan financial planning should have proper qualification from a certified board. A certified financial planner certification is required to become a certified financial planner in the US. However, in Canada, this certificate is granted by the Financial Planners Standards Council.

The role of financial planner is to prepare a comprehensive plan in the aim of protecting you from unfavorable and unforeseen situations so that it averts your from a financial hole and ascertains sound financial health even after retirement.