Tag: Financial Planning

Financial planning is the systematized process of meeting your financial objectives through appropriate investment avenues. Every investor harbours a different aim, in this regard. For some it is wealth creation for wealth’s sake, others aspire to buy a home (or several), whereas others wish to build their assets so that they may leave behind some financial security for their loved ones. However, to fulfil these dreams one must first analyse their current financial situations. Financial planning begins by looking at a person’s income, their savings and assets, their tax records, their expenses and debts, their appetite for taking financial risks and even their age, before laying down a tangible and realistic investment plan suited to these observations. Financial planning is ultimately the move one makes to take charge of their and their family’s long term financial security.

Mutual fund investments are relevant to financial planning as they are the epitome of all those financial products that allow us to achieve our financial goals. The ramifications of mutual fund investing, what they consist of and how they will contribute to our financial well being are pre-determined. Every fund has a different goal, which allows investors to invest only in those that will be advantageous to them. Equity mutual funds strengthen one’s finances in the long run, focusing on growth with short term risk. Thus, when engaged in planning your finances, try and figure out what your needs in the long term will be, taking into account old age, your children’s education, and inflationary prices and so on and so forth. Having calculated your potential requirements, invest in an appropriate equity mutual fund that, at the time of maturity will provide you with enough returns to meet your predicted needs. If they do not, then one can always reinvest the gathered returns.

This is a more convenient move than the painful process of building an equity portfolio in the stock market, one share after another. Mutual funds are highly beneficial in the process of planning your finances as they help you to focus your investments today based on your anticipated need for tomorrow in one swift move, rather than wasting your time with other more elaborate investment tools and duties that can be outsourced. For e.g., mutual fund investors are not required to have a keen knowledge of the market as executive decisions are all made by the fund manager.

The combined convenience of a mutual fund along with the experience of the manager as well as the lucrative nature of the medium itself results in a winning combination for anyone looking to invest with the view of long-term growth.

One of the newer phrases to find its way into the vocabulary of today’s more progressive financial planners is holistic financial planning. So what does it mean and why now? Also is this newer type of all inclusive financial planning something that you can benefit by?

In broader terms, holistic financial planning identifies and takes into consideration the entirety of a clients financial situation both present and on into the future. When the client receives completely inclusive or complete holistic advice, they are far better able to make decisions that insure that their total objectives are more realistically obtained.

In the past far too many financial planners and their clients took a far more narrowly focused approach to Financial Planning. Each consideration was held out and dealt with separately. One by one increments or facets of a persons finances would be analyzed and dealt with as a singular unit. In the end it was felt that all the pieces would fall together correctly and they often did.

How Holistic Financial Planning Works

With holistic financial planning however, all aspects of clients finances, goals, lifestyle and ideals are brought together at once and analyzed as a whole. A much bigger picture is viewed, if you will and also other peripheral aspects and factors such as clients principles are entered into the equation as well. Something that was rarely done in the past.

Holistic financial planning begins with a preliminary financial advisory process that includes an initial fact finding stage. This initial stage of the process is geared towards assessing a clients likes and dislikes, general opinions, goals both short and long term. Also during this initial fact finding stage, information such as a clients risk tolerance is also gathered and filed for analysis. Then after the necessary preliminary information has been gathered, it’s on to the next phase.

This secondary stage would be the strategy recommendation stage, where all of the data gathered is used to formulate an inclusive and objective strategy that takes all into account. In this stage the clients objectives and goals are prepared and laid out with a focus on creating wealth, debt management, taxation plans, estate planning and of course risk.

While this process may sound simple on the surface, it’s not. In fact in some cases the entire preliminary review can involve several meetings and in the end what is arrived at must also be approved by the client. As these meetings and review sessions unfold, often times a client will be given several options to choose from, such that in the end the final plan meshes seamlessly with their principles and values.

The final phase of the holistic financial planning process involves the monitoring/review process. As previously indicated, this a continuous and ongoing function in which benchmarks the applied overall plans outcomes and performance levels, factored against the clients perceived goals and objectives.

This ongoing process includes periodic portfolio value assessment reports, workshops and seminars, portfolio review meetings and strategy sessions and of course the end of year pre-taxation strategy and planning sessions. So hopefully now you can see that it’s a system that provides holistic advice for clients geared towards growth, security and peace of mind.