As per the CFP Board of Standards "Financial Planning is the process of meeting life goals through the proper management of finances." Life goals can include buying a home,saving for your child's education/Marriage or planning for retirement.
Following are the benefits of financial planning
Yes, but only if he has the time to allocate for this process. A complete understanding of financial matters is also necessary which should be left to the expert. Each person's requirements and financial situations are unique hence standard written down processes might not help all as plans need to be customized as per the requirements which only a financial expert can decipher and advice.
The financial planning is a six-step process -
1. Establishing relationship with the client.
2. Understanding requirements (Data Gathering)
3. Analysing the financial status of the customer.
4. Recommendation based on the requirements.
5. Implementation of the steps suggested.
6. Review, re-alignment and revision of the plan.
No, CFPs are not authorized to provide specific stock related advise. The client will only be advised on the avenues of investment, like Mutual Funds, Fixed Deposits etc, without providing details on which fund or FDs to invest.
The advice provided by the CFP is applicable as per the client's current life stage, life cycle, assets, cash flow, liabilities, life goals etc. All these things keep changing with time. It is advisable to visit the CFP either once a year on in case of any major change in his finance's or life cycle.
The advice given by the CFP in the Pro plan will be more personalized as the CFP will be able to judge better the risk profile and risk appetite of the customer through personal meet.
The basic plan is recommended for the user who has a basic idea on the financial planning. This will help him to interpret the report in a better way.
The recommendations provided are valid for a period of one year, it will be reviewed by the CFP once in 6 months for course correction. The user can also get in touch with the CFPs before 6 month in case of any changes in his financial situation.
No. The user does not have this option in the basic plan. Though the recommendations provided are very simple and can be understood and followed by anyone.
No, the fees will not be refunded.