As investors in Malaysia become more sophisticated, there is a growing need for objective financial planning advice. In the absence of government regulations on Financial Planners, the public is in dire need of a credential that represents high standards of competence and ethical practice.
What is Financial Planning?
Financial Planning is a professional service to individuals, their families and their businesses to provide impartial assistance in analysing and organising personal financial affairs in order to achieve financial and lifestyle goals.
For the client, this process involves gathering relevant financial information, determining his goals in life, examining his current financial status and coming up with a strategy or plan as to how he may achieve his goals given his current situation and future plans. These goals in life may include buying a home, saving for a child’s education, planning for a comfortable retirement or starting a business.
Financial planning is a systematic approach whereby the financial planner helps the customer to maximize his existing financial resources by utilizing financial tools to achieve his financial goals.
Financial planning is simple mathematics. There are 3 major components :
- Financial Resources (FR)
- Financial Tools (FT)
- Financial Goals (FG)
When you want to maximize your existing financial resources by using various financial tools to achieve your financial goals, that is financial planning.
Financial Planning : FR + FT = FG
In other words, financial planning is the process of meeting your life goals through proper management of your finances. Life goals can include buying a home, saving for your children's education or planning for retirement. It is a process that consists of specific steps that help you to take a big-picture look at where you are financially. Using these steps you can work out where you are now, what you may need in the future and what you must do to reach your goals.