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What Is Financial Planning?

1. What Is Financial Planning?

Financial planning is the process of setting, planning, achieving and reviewing your life goals through the proper management of your finances.


Life goals include buying a home, getting married, raising children and planning for their education, insuring yourself and your family, setting aside money for retirement and investing it, estate and tax planning, etc.


Life goals are not limited to personal matters; they may involve starting a business and financing it, joining or withdrawing from a partnership, etc.


2. Benefits of Financial planning 

Life is full of changes and challenges. You need to plan and modify your life goals as you negotiate every turn along the way.


Financial planning reduces surprises and makes you more in control of your goals.


Financial planning enables you to list out your financial expectations, present and future, and helps you set up realistic plans, objectively evaluate alternatives, and take effective measures.


It also helps you see how your financial goals may be interrelated and how they may be balanced with each other.

3. The Financial Planning Process

The Financial Planning Process is a straight-forward 6-step approach which provides you with action plans designed to achieve financial goals and financial health.


client-planner relationships


Gathering client data


determining goals




the client's

financial status analysing



clients information

Developing and

presenting the financial plan


the financial plan


the financial plan

4. Who needs financial planning? 


Do not think that financial planning is only for multi-millionaires.

You do not need to have accumulated a lot of money to turn to financial planning. You may start as soon as you are financially independent.


More and more ordinary men and women have recognised the importance of starting financial planning early to benefit themselves and their families.

Starting financial planning early has the advantage of achieving your life goals ahead of others who do not.


You may be surprised to know that your relatives and friends have already been practising financial planning for some time with the help of financial planners


5. Risk management is the basic of a healthy financial planning 

With proper life insurance , medical insurance and income protection can protect finances for the loved one。

Securing finances for loved ones


Being a bread-winner of the family, you have to ensure the dependents are backed by a strong financial shield.


Child plan to secure their dreams

Wanting the best for your child is very natural. For every parent, the primary concern lies in ensuring that their kids have a secure and better tomorrow. This involves being able to give your child the best possible future and have all the necessary financial support during all the major milestones of their lives—education, lifestyle, marriage and so on. But to achieve this, one should have a clear-cut plan about how to provide for the same.


6. Why hire financial planners? 

Most people may lack the expertise to do financial planning on their own but some
people may like to do financial planning all by themselves.


The obvious advantage is that there are no fees to pay. However, this does not mean that it is costless.

There is the cost of your valuable time which may be spent more productively elsewhere, the cost of not having the latest information, the cost of not being able to capitalize on more profitable arrangements, the discomfort of not having a second, professional opinion, etc. You may also have to invest in your own financial software packages or other analytical tools, or subscribe to investment and financial reports.

For these reasons, the benefits of hiring an outside adviser may far outweigh the cost.

The cost of getting professional advice varies according to the funds involved and the complexity of the financial arrangements to be set up.

Please contact any of our CFP professionals in Hong Kong or any institutions providing financial planning services. They will be glad to help you assess your needs.

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7. Certified Financial Planner professionals with a difference

The following professionals may assist you in one or more areas of your financial planning
process. They include:
• Accountants
• Investment Advisers
• Financial Planners
• Retirement Benefit Advisers
• Bankers
• Lawyers or Estate Planners
• Insurance Agents
• Stockbrokers


Each of the above types of advisers is specialized in their own fields. Some of them may
be qualified to provide advice in more than one capacity.
CFP professionals, however, are financial planners who hold a CERTIFIED FINANCIAL
PLANNER designation, are trained to take clients through the financial planning process
in a comprehensive way.


8. Why plan with Certified Financial Planner professionals

They are holding a CP certificate issued by The Institute of Financial Planners of Hong
Kong (IFPHK) or affiliated institutes of the Financial Planning Standards Board (FPSB) around the world.

They will, if you permit, review all of your financial planning needs including savings,
investment, insurance, retirement, estate and tax planning, etc.

You may however instruct him on a single financial issue but they will always do so within
the context of your overall financial situation.

This comprehensive approach to find solutions for your financial goals sets the CFP
professionals apart from other financial advisers, who may have been trained to focus only
on a particular area of your financial needs.


9. CFP marks of professional destination

Quality and trustworthiness of CFP professionals are achieved through four
major steps.


First, IFPHK puts great emphasis on the CFP certification process. Initial certification is based on fulfilment of the 4Es requirements, i.e., Education, Examination, Experience and Ethics.

Secondly, continued assurance of competence is achieved through re- certification every year.

All CP certificates must be renewed every year and holders must (1) satisfy IFPHK that they have completed a minimum of fifteen hours of approved Continuing Education to stay abreast with industry developments, and (2) make a Voluntary Disclosure to IFPHK any public, civil, criminal or disciplinary actions that may have been taken against them in the previous year.


Thirdly, IFPHK has set up Disciplinary Rules and Procedures to enforce its Code of Ethics and Professional Responsibility and maintain the high professional standard of CFP professional.

Finally, to further promote transparency and public confidence, IFPHK will verify the current standing of a CFP professional at any time by contacting IFPHK.

In conclusion, CFP professionals (1) are of the highest competence and ethical standards, (2) hold a valid certificate, and (3) are always ready to provide objective solutions to meet your financial planning needs.


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10. How to make financial planning work for you

While CFP professionals will do their part, making financial planning a success also requires your partnership in the process. Our recommendations are as follows:
• Start financial planning as soon as you can.
• Set measurable financial goals.
• Understand that financial goals may be interrelated.
• Be realistic in your expectations.
• Play an active role throughout the process.
• Re-assess your financial position periodically.

The Financial Planning Process and our recommendations for effective financial planning
are only expressed here in a simplified synoptic format. Ask your CFP professional to
explain the above to you in detail.


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11. Take the first step into a bright future

Starting financial planning and choosing a financial planner may be one of the most
important decisions you make for yourself and your family.


No matter how simple or complex your life goals are, get a CFP professional to do the
balancing act for you.


And take the time to select one of us.

You may also contact the Founding Members of IFPHK listed in our brochure titled The
Institute of Financial Planners of Hong Kong.


Source: The Institute of Financial Planners of Hong Kong Limited.


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