Professional Financial Planning

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Professional Financial Planning

• Insuring Economic Security

Steven George Conville - A Review
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What is Professional Financial Planning?

• Simply Put
• The process of allowing a person with financial
  needs to develop and implement a plan to meet
  those needs.

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The Financial Planning Process

• Gather relevant data and information
• Analyze current position and identify all
  financial problems
• Define and develop financial goals
• Develop a strategy to meet those goals
• Implement the plans
• Regularly review and Update the Plans

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The Need for Financial PlanningExample The Roth
IRA

• What is an IRA?
• Why should I save for retirement? I do have
  Social Security!
• How much do I need to have for retirement?
• Why would I want to save on a taxed advantaged
  basis?
• How does my employers retirement plan fit in?

• I have an IRA. Should I convert to a Roth IRA?
• What should I invest in?
• How does risk come into play?
• Have I already met life insurance, health
  insurance, and disability income needs?
• Will a Roth work Better?

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Financial Planners

• Professional Designations
• CFP, Certified Financial Planner Awarded by CFP
  Board of Standards
• ChFC, Chartered Financial Consultant The
  American College of Financial Planning
• PFS, Personal Financial Specialist American
  Institute of Certified Public Accountants

• How Compensated
• Fee-only- charges an hourly or flat fee
• Fee-based fee based on percentage of assets
• Fee-offset set fee but offsets fee on sales
  commission
• Commission based planners income generated by
  sales

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Economic Security

• Threats to Economic Security
• Premature death of a wage earner and/or
  supporting spouse
• Divorce
• Illness or Accident medical expenses or lost
  income
• Inadequate income during retirement
• Loss of Job

• Tripod of Economic Security
• Social Security
• Employer Based Benefits
• Individual Investment and Insurance
• What are the trends wrt the above?
• What do you have control over?

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Income and Consumption Patterns

• Milton Friedman
• Permanent Income Hypothesis
• Notion of current spending decisions a function
  of their total lifetime income in mind.

• Franco Modigliani
• Life Cycle Hypothesis
• Rate of consumption in a period is part of a
  life-long plan. Income in one period is just one
  input to shaping that plan.

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A Financial Life Cycle
What is happening during these periods?
Income
Consumption
Early Yrs.
Post Retirement
Middle Yrs.
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Why Should a Person Use aFinancial Planner?

• Identifying the need and the solution
• Peace of mind
• Develop a strategy to achieve financial goals
• Manage risk from unfavorable human life
  contingencies
• Increasing wealth
• Provide efficiency in transferring assets to the
  next generation

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What is Required

• Proper record keeping
• Proper construction of financial statements
• Developing reasonable financial goals
• Account identification, source of income, how
  titled, when cash flow is generated
• Proper valuation of assets

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Thank You
http//www.stevenconville.ca
Copyright Steven Conville
- Steven G. Conville
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