Financial planner

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A financial planner or personal financial planner is a professional who prepares financial plans for people. These financial plans often cover cash flow management, retirement planning, investment planning, financial risk management, insurance planning, tax planning, estate planning and business succession planning (for business owners).


Financial planning should cover all areas of the client's financial needs and should result in the achievement of each of the client's goals as required. The scope of planning would usually include the following:

Risk Management and Insurance Planning 
Managing cash flow risks through sound risk management and insurance techniques
Investment and Planning Issues 
Planning, creating and managing capital accumulation to generate future capital and cash flows for reinvestment and spending, including managing for risk-adjusted returns and to deal with inflation
Retirement Planning 
Planning to ensure financial independence at retirement including 401Ks, IRAs etc.
Tax Planning 
Planning for the reduction of tax liabilities and the freeing-up of cash flows for other purposes
Estate Planning 
Planning for the creation, accumulation, conservation and distribution of assets
Cash Flow and Liability Management 
Maintaining and enhancing personal cash flows through debt and lifestyle management


The personal financial planning process is described in ISO 22222:2005 as consisting of six steps:[1]

Step 1: Establishing and defining the client and personal financial planner relationship

Step 2: Gathering client data and determining goals and expectations

Step 3: Analysing and evaluating the client's financial status

Step 4: Developing and presenting the financial plan

Step 5: Implementing the financial planning recommendations

Step 6: Monitoring the financial plan and the financial planning relationship

Licensing, regulations and self-regulation[edit]

In many countries, there are no requirements regarding use of the title of 'financial planner'.[2][3] What are 3-5 opportunities for financial planners catering to land/business owners with a net worth of $5 million? Financial planners who cater to land or business owners with a net worth of $5 million should be prudent in their investment choices due to the amount involved and client expectations. When choosing the best investment vehicles for their clients, the financial planner must consider factors such as risk, client expectations, and economic fluctuations. Several options exist for the financial planner whose client is a business or landowner with a net worth of $5 million. They include Exchange Traded Funds, select stock options, strategic rental income, private real estate lending, and mutual funds. Findings • Exchange-Traded Funds - Traded Funds (ETFs) are portfolio-diversifying, risk-spreading investment vehicles that allow financial planners and investors to buy stocks from different companies instead of only one stock entity. (Source 3) - Financial planners targeting opportunities for land or business owners worth around $5 million could benefit from the lower risk factor involved in purchasing stocks from different companies in the stock as well as the ability to choose from a wide variety of options. (Source 2) - ETFs are suitable investment options for an investor worth $5million because when used correctly, they ensure additional safety in the investment based on their operation using indexed funds such as the S&P 500. (Source 2)

• Special Stock Options - Businesspeople or investors worth $5 million could benefit immensely from investing in select stock options such as those involving companies with intellectual property in renewable energy. (Source 1) - Many financial advisory and investment management companies are currently investing in the stock of companies with intellectual property for power generation, distribution, storage, and electric transport vehicle technology. (Source 1) - Even modest investments in companies such as Wartsila and Iberdrola have yielded their investors' good returns due to the companies’ commitment to renewable energy generation, distribution, and storage. (Source 1) - Alternatively, the financial planner could suggest other similar investments in environmental conservation niches such as wastewater treatment, recycling, and water pollution management. (Source 1)

• Strategic Rental Income - If designed carefully, investments in rental income can provide annual returns of up to 9% for investors with a net worth of $5 million. (Source 3) - However, financial planners must be very keen when choosing the real estate because of America’s volatile real estate industry and its slow rate of return. (Source 5) - If done well, real estate investments could provide investors worth $5 million with appreciating annual cash flow due to the increased demand for high-quality, well-priced houses in the United States. (Source 5)

• Private Real Estate Lending - Many financial planners have suggested peer-to-peer lending to their clients, and it is not stable due to the loose regulatory framework, high default risks, and encroachment from online lending platforms. (Source 3) - Lending privately to real estate developers could earn investors with a net worth of $5 million more in the long run, provided the choice of the developer is wise enough. (Source 4) - Investors could also consider acquiring a stake in the property as additional terms during the process of drafting terms with lawyers on both sides of the investment process. (Source 4)

• Mutual Funds - Mutual Funds are unique investment vehicles that combine the funds of many investors and use them to buy high-return securities with manageable levels of risk. (Source 5) - Investing in regulated and adequately managed mutual funds enables investors to realize their predetermined goals in terms of risk management and average rates of returns as well as incur fewer costs after settling trading commissions and financial planner fees. (Source 6) - Unlike treasury bonds, which take between 10 and 20 years, investments based on mutual funds do not need extremely long periods for the investor to realize returns on their seed capital. (Source 6) - The mutual fund is one of the most accessible investment avenues for a financial planner to explain to investors with enough capital because it is relatively straightforward compared to bonds, preferred stocks, retirement funds, and annuities. (Source 5)


In Australia, a company providing financial services must obtain a licence from the Australian Securities and Investments Commission.[4] However, there are no requirements for the individuals providing the financial advice and the ASIC website states "Holding an AFS licence does not provide a guarantee of the probity or quality of the licensee's services".


Financial Planning Standards Board India


The Securities Commission Malaysia introduced legislation through amendments made to the Securities Industry Act in 2003 to regulate financial planning and the use of the title or related-title of 'financial planner' or to conduct activities related to financial planning.[5]

In 2005, amendments to the Malaysian Insurance Act require those who carry out financial advisory business (including financial planning activities related to insurance) and/or use the title of financial adviser under their firm (which, like in Singapore, must be a corporate structure) to obtain a license from Bank Negara Malaysia (BNM).[6] Some persons who offer financial advisory services, e.g., licensed life insurance agents, are exempted from licensing as a practising requirement.


In Singapore, financial services are highly regulated by The Monetary Authority of Singapore (MAS), the regulator and supervisor of financial institutions in Singapore. Rules are set by MAS for financial institutions and are implemented through legislation, regulations, directions and notices.[7] Currently, the majority of the financial planners (financial consultants) are commission-based, which may cause a conflict of interest related to the products recommended. In 2015, Balanced scorecard framework was implemented to better align the interests of the FA industry and consumers. This ensure FA representatives and supervisors meet key performance indicators that are not related to sales, such as providing suitable product recommendations and making proper disclosure of material information to customers (Non-Sales KPI). Failure to achieve good grades for these non-sales KPI will directly affect their commission (variable income).

New Zealand[edit]

The Financial Markets Authority (FMA) (formerly the Securities Commission) provides Authorisation to individuals who provide Personalised Financial Advice, Investment Planning Services and/or Discretionary Investment Management Services.[8] Individuals who receive Authorisation are referred to as an Authorised Financial Adviser (AFA). In order to receive Authorisation individuals must complete the National Certificate in Financial Services (Financial Advice) (Level 5).

See also[edit]


  1. ^ "ISO 22222:2005 - Personal financial planning - Requirements for personal financial planners". 2005-12-21. Retrieved 2017-03-31.
  2. ^ Peter Koulizos (2013-10-02). "The unregulated business of property investment advice". Retrieved 2017-03-31.
  3. ^ "Is the future of financial 'advice' unregulated?". 2012-11-01. Retrieved 2017-03-31.
  4. ^ "AFS licensees | ASIC - Australian Securities and Investments Commission". ASIC. 2014-10-20. Retrieved 2017-03-31.
  5. ^ Financial Planning Association - Financial Planning History Made in Malaysia
  6. ^ Bank Negara Malaysia - Introduction of Financial Advisers
  7. ^ Monetary Authority of Singapore
  8. ^ Financial Markets Authority