The Financial Planning Profession

Published: 2021-06-29 06:56:05
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Category: Business

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Week 1: The Financial Planning Profession
* Introduction
o Develop plan to meet client's life goals
o Ongoing review-changing environment, client needs
o Formal qualification and ongoing accreditation
* Why do clients need financial planning?
o Budgeting-manage income, expenses
o CF management-e.g. loan repayment
o Savings planning-expenditure and wealth creation
o Asset acquisition-home and investments, gearing
o Investment planning-asset allocation, timing
o Tax planning-tax strategies to maximise wealth, minimise tax
o Wealth protection-insurance and structures
o Capital protection-risk v return, longevity
o Complexity of fin. markets and products
o Legislative changes-tax and super law changes
o Financial independence in retirement
* Why don't people undertake financial planning?
o Lack knowledge: don't know about FP or their financial position can be improved
o Insufficient resources: Asset or income too low for FP to be useful
o Too complex: Procrastination and intrusive
o Avoid unpleasant topics: e.g. death, disability
o Can't afford: consider it costly
o No tangible value: can't see value of the advice
* FP Profession
o Heavily regulated for financial advice providers
o Minimum training requirements and licensed by ASIC
o Licensing: AFSL holders (licensee) or authorised reps of license holders
o Steps to become FP:
 Bachelor degree in accounting, finance, economics.
 ASIC RG 146 training and other on the job training (6m to 2yrs) if they want to provide financial product advice
 Select a license holder (employer). Ultimate responsibility for advice given and ensure reps meet compliance and training requirements
 CFP Program gives FPs credibility and certification with FPA (FP of Australia)
 If providing specialised or securities advice, should complete competency training in various products/strategies.
 FP undertake CPD (continuing professional development)
o Required skills/knowledge
 People skills (interview, trust)
 Information gathering, analysing
 Consider alternative strategies and preparing financial plans

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