Essay About Minimum Training Requirements And Business Planning

The Financial Planning Profession
Essay Preview: The Financial Planning Profession
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Week 1: The Financial Planning Profession
Introduction
Develop plan to meet clients life goals
Ongoing review-changing environment, client needs
Formal qualification and ongoing accreditation
Why do clients need financial planning?
Budgeting-manage income, expenses
CF management-e.g. loan repayment
Savings planning-expenditure and wealth creation
Asset acquisition-home and investments, gearing
Investment planning-asset allocation, timing
Tax planning-tax strategies to maximise wealth, minimise tax
Wealth protection-insurance and structures
Capital protection-risk v return, longevity
Complexity of fin. markets and products
Legislative changes-tax and super law changes
Financial independence in retirement
Why dont people undertake financial planning?
Lack knowledge: dont know about FP or their financial position can be improved
Insufficient resources: Asset or income too low for FP to be useful
Too complex: Procrastination and intrusive
Avoid unpleasant topics: e.g. death, disability
Cant afford: consider it costly
No tangible value: cant see value of the advice
FP Profession
FPA, FINSIA, ANZIIF
Heavily regulated for financial advice providers
Minimum training requirements and licensed by ASIC
Licensing: AFSL holders (licensee) or authorised reps of license holders
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)
Required skills/knowledge
People skills (interview, trust)
Information gathering, analysing
Consider alternative strategies and preparing financial plans
Business planning and business acumen
Negotiation skills
Mentoring, coaching and teaching skills when giving advice
Knowledge of global economy, trends, investments and strategies
Compliance and management skills
Where do FP work?
Big4 banks and wealth management firms (retail, business, private banking levels)
Boutiques, brokerage firms, accounting, credit-counselling firms
Own practice or in partnership with accountants/mortgage brokers
Recent FP Industry News
Storm Financials placed into VA and ceased trading in 2009.
FOFA (Future of Financial Advice) Legislation
Ban upfront commissions on new investments and super and volume based payments
Client must agree to ongoing advice fees
FP must have clients best interest in mind
Financial Planning Practice Planning Activities
Select a practice structure
Prepare business plan
Statement of how the FP aims to perform
Continuously referred to and reviewed
Goals and objectives
Audience of the business plan include investors, lenders, key executives
Find mentor
Create advisory board (outsource)
Back office team
IT system
Marketing plan
Business Plan Structure
Executive summary
Written last, outline of entire business plan
Describe the business, activities and management
Business opportunities and reason to go into the market
Overview of market research, analysis and critical risks
Summary of marketing plan
Summary of financial and operational plans
Financing required to start business, what type and for what purpose
Introduction
Business description
Industry description and current conditions
Opportunities
Market research and analysis
Is there a market for your service or product
Is the market growing
Market