Financial Planning
Setting the foundation for your financial future
Contents
What is Financial Planning?
Financial planning is the process of setting, planning, achieving, and reviewing your life goals through proper financial management.
Life goals include buying a home, getting married, raising children and planning for their education, insuring yourself and your family, saving and investing for retirement, estate and tax planning, etc.
Life goals are not limited to personal matters; they may involve starting and financing a business, joining or leaving a partnership, etc.
Benefits of Financial Planning
Life is full of changes and challenges. You need to plan and modify your life goals at every turn during the negotiation process.
Financial planning can reduce surprises and give you better control over your goals.
Financial planning allows you to list your financial expectations, now and in the future, and helps you develop realistic plans, objectively evaluate alternatives, and take effective measures.
It can also help you understand how your financial goals relate to each other and how they balance each other.
Financial Planning Process
The financial planning process is a straightforward 6-step method that provides you with an action plan designed to achieve financial goals and financial health.
Establish client-planner relationship
Building trust and understanding your needs
Collect client data and determine goals
Gathering information and setting clear objectives
Determine client's financial status
Analyzing your current financial situation
Analyze and evaluate client information
Finding opportunities and addressing challenges
Develop and present financial plan
Creating a customized roadmap for your finances
Implement and monitor financial plan
Taking action and tracking progress over time
Who Needs Financial Planning?
Don't think that financial planning is only suitable for multimillionaires.
You don't need to accumulate a large amount of funds to turn to financial planning. You can start immediately after economic independence.
More and more ordinary men and women have recognized the importance of starting financial planning early to benefit themselves and their families.
The advantage of starting financial planning early is that you can get ahead of others who haven't achieved your life goals.
You may be surprised to find that your friends and relatives have been doing financial planning with the help of a financial planner for some time.
Risk Management is the Foundation
With proper life insurance, medical insurance, and income protection, you can safeguard your loved ones' finances.
As the breadwinner of the family, you must ensure that your dependents have strong financial security.
It is natural to want to give children the best. For every parent, the primary concern is to ensure that their children have a safe and better tomorrow. This includes being able to give your child the best future and get all the necessary financial support in all the major milestones of their lives—education, lifestyle, marriage, etc. But to achieve this, people should have a clear plan on how to provide the same.
Why Hire a Financial Planner?
The general public may not have professional knowledge of financial planning, but some people may like to plan everything themselves.
The most obvious benefit is that you don't have to pay any fees, but this does not mean that you don't pay other costs.
The main costs or additional expenses include: inability to apply valuable time to other more cost-effective matters; inability to obtain the latest information; possible missed use of more profitable strategies; inability to obtain additional professional opinions, etc.
For all the above reasons, the benefits of hiring a financial planner far outweigh the cost. The cost of hiring a financial planner will depend on the size of the investment amount and the complexity of the financial arrangement.
Please contact a CFP professional in Hong Kong or a company that provides financial planning services. They are happy to help you evaluate your financial planning needs.
CFP Certified Financial Planners are Different
The following professionals can assist you in handling one or more financial planning processes. They include:
• Accountants • Financial planners • Investment advisors • Retirement benefit consultants • Bankers • Insurance brokers • Lawyers or estate planners • Stock brokers
Each of the above advisors has their own strengths. But some of them can provide you with more than one professional opinion.
Financial planners who hold CFP certified financial planner qualification certification have undergone professional training and can provide clients with a comprehensive financial planning process.
Why Choose a CFP Professional
CFP professionals are financial planners who hold a CFP certified financial planner certificate. The certificate is issued by the Hong Kong Institute of Financial Planners (FPHK) or a member association of the Financial Planning Standards Board (FPSB) around the world.
With your permission, they will review your financial planning needs. Including savings, investment, insurance, retirement, estate and tax arrangements, etc.
You can also hire them to deal with individual financial issues, but they will still provide you with professional advice based on your overall financial situation.
The advantage of CFP professionals is that they can use a comprehensive approach to find solutions for you to achieve your set financial goals. Because other financial advisors may only provide opinions on one of your financial needs.
CFP Certification Mark is a Professional Guarantee
The quality and reliability of CFP professionals are mainly composed of four areas.
First, the association has very strict requirements for the CFP certification process. CFP professionals need to meet four requirements (i.e., education, examination, experience, and ethics) in order to receive CFP qualification certification for the first time.
Second, through the annual certification renewal system, to ensure that the certificate holder maintains its professional quality.
All CFP qualification certifications need to be updated annually. To ensure certificate holders continuously enrich their professional knowledge and skills, they must complete at least fifteen hours of continuing education courses every year.
Third, the association sets up disciplinary rules and procedures to maintain the 'Professional Ethics and Responsibilities' of the association and the high professional standards of CFP professionals.
To summarize, CFP professionals (1) have the highest competence and professional ethics, (2) hold a CFP certified financial planner certificate, and (3) objectively provide solutions at any time to meet your financial planning needs.
How to Make Good Use of Financial Planning?
Despite CFP professionals providing their professional opinions, your participation is also very important to plan a successful financial plan. Here are our suggestions:
• Start financial planning early. • Set measurable financial goals. • Understand that financial goals may be interconnected. • Set realistic expectations. • Actively participate in the entire financial planning process. • Regularly review your financial situation.
The above financial planning process and our suggestions are expressed in a simple mode. If you need a detailed explanation, please consult your CFP professional.
Take the First Step for a Better Future
Using financial planning and choosing a financial planner is one of the major decisions you make for yourself and your family.
Whether your life goals are simple or complex, you need a CFP professional to balance all aspects of your needs.
Please carefully refer to the list of CFP professionals to choose a suitable financial planner.
You can also inquire with the founding members of the association (see the introduction to the Hong Kong Institute of Financial Planners).