We often purchase insurance, unit trusts and other financial products without really understanding or knowing the amount we should purchase. It is done without proper knowledge. Decisions are often influenced by the sales pitch and our feelings towards the person who is selling.
The purchases of financial products must be an informed decision. It should be free from influences of product pushers. The products that are purchased must serve as an instrument in the overall financial goal. Yes, you must have a financial goal, and if you don’t, someone else will have plans for your money.
So, what is then financial planning? It is a process of defining your financial goals, knowing what and when you will use your money and laying out a plan of action with specific steps you need to take to achieve those goals.
To assist you to reach your financial goals, you can get the help of financial planners.
A financial planner will help you by advising on:
- The amount you need to save for specific reasons, such as retirement, purchase of property, vacation, and so on.
- Investment portfolio.
- The type and amount of insurance you need.
- Emergency fund.
- Estate Planning.
- Cash Flow.
- Wealth Protection.
- Mortgages
There are financial planners who provide tax planning
Financial planners will gather personal and financial data to provide you with recommendations. A good financial planner will make these recommendations only after hearing and understanding you.
Financial planners are professionals and they are compensated by one or combination of the following ways:
- An hourly rate.
- A flat fee for a specific project.
- An annual retainer fee.
- Fee charged as percentage of the assets they manage – usually 0.5% to 2.5%.
- Commissions from financial products bought through them.
In today’s fast changing world, having a financial planner to help you with your financial goals is important. If you are interested in knowing more, get in touch with us.
