Financial Planning FAQ’s

Ans. Financial planning is a step-by-step approach to meet one’s life goals. A financial plan acts as a guide as you go through life’s journey. Essentially, it helps you be in control of your income, expenses and investments such that you can manage your money and achieve your goals.

Ans. There are numerous practical benefits to financial planning. It helps you to:

  • Increase your savings: It may be possible to save money without having a financial plan. But it may not be the most efficient way to go about it. When you create a financial plan, you get a good deal of insight into your income and expenses. You can track and cut down your costs consciously. This automatically increases your savings in the long run.
  • Enjoy a better standard of living: Most people assume that they would have to sacrifice their standard of living if their monthly bills and EMI repayments are to be addressed. On the contrary, with a good financial plan, you would not need to compromise your lifestyle. It is possible to achieve your goals while living in relative comfort.
  • Be prepared for emergencies: Creating an emergency fund is a critical aspect of financial planning. Here, you need to ensure that you have a fund that is equal to at least 6 months of your monthly salary. This way, you don’t have to worry about procuring funds in case of a family emergency or a job loss. The emergency fund can help you pay for varied expenses on time.
  • Attain peace of mind: With adequate funds at hand, you can cover your monthly expenses, invest for your future goals and splurge a little for yourself and your family, without worry. Financial planning helps you manage your money efficiently and enjoy peace of mind. Don’t worry if you have not yet reached this stage. If you are on the path of financial planning, the destination of financial peace is not very far away.

Ans. Financial planning provides direction and meaning to your financial decisions. Buying a particular investment product might help you save adequately to finance your child’s higher education. You can also adapt more easily to life changes and feel more secure that your goals are on track. Financial planning helps you understand how each financial decision you make affects other areas of your finances.

Ans. Consider a visit to your doctor. Without complete and fully accurate details, your doctor cannot prescribe the best course of action. The same applies to financial planning. In order to obtain the best service for your “financial health,” all details and specifics must be disclosed.

Ans. Absolutely.  It is Elite Wealth Ltd. policy not to discuss our clients or their business with anyone, including those that have referred you to us. We do not sell or share our client list or information with any outside entities unless required by law. Even after you may no longer be a client, we uphold this policy.

Ans. Even the most prudent person can’t prepare against every crisis, as the world learned in the pandemic and many families learn every month. What thinking ahead does is give you a chance to work through things that could happen and do your best to prepare for them. Financial planning is a common sense approach to managing your finances to reach your future life goals. This should be an ongoing process so you can shape your life and goals to fit the changes that will inevitably come. Remember that events beyond your control such as inflation or changes in the stock market or interest rates will affect your financial planning results.

Ans. Your responsibilities as a client are:

  • To communicate clearly and honestly with your advisor so they understand your financial circumstances, investment objectives and experience.
  • To ask questions about investment matters that you do not understand.
  • Be realistic in your expectations
  • To track & monitor your investments based on your changing needs

 

Ans. You may decide to seek help from a professional financial planner if:

  • You need expertise you don’t possess in certain areas of your finances. For example, a planner can help you evaluate the level of risk in your investment portfolio and revise your asset allocation;
  • You don’t feel you have the time to spare to do your own financial planning;
  • You know that you need to improve your current financial situation but don’t know where to start;
  • You feel that a professional advisor could help you improve on how you are currently managing your finances;
  • You have an immediate need or unexpected life event such as an inheritance or major illness;
  • You want to get a professional opinion about the financial plan you developed for yourself.

Ans. It’s critical to review your plan at least once per year, to ensure the data you’re working with is accurate, your plan reflects your goals and priorities, and you’re clear on the action items that you need to proactively manage over the next six to 12 months to keep things on track.

Ans. Financial planning covers all aspects of a person’s financial well-being. This includes savings, investments, retirement and college savings plans, insurance coverage, and estate planning. Retirement planning covers only investments made for retirement.

Ans. Rate of returns vary from one investment instrument to another. Rate of returns are never guaranteed, hence the need to plan investments.

Ans. All your investments will be in your name and its can be tracked online also

Ans. Every individual who wants to meet short and long term financial goals, needs a Financial Planner.

Ans. Financial Planning is an ongoing process to help you make sensible decisions about money that can help you achieve your goals in life; it’s not just about buying products. Our services cover various aspects of planning:

  • Risk Profiling
  • Review of existing assets and liabilities
  • Counseling for removing unproductive assets
  • Assessment of Financial Goals (retirement, child education, home purchase, etc.)
  • Prioritization of Financial Goals
  • Goal Affordability
  • Goal-based Investment Advice
  • Customized Asset Allocation
  • Emergency/Liquidity Planning
  • Detailed Investment Plan (including mutual funds, and other products)
  • Review of Existing Life Insurance products; Review of existing Health and Disability Insurance
  • Insurance Adequacy Assessment
  • And many more

Ans. Financial planning starts from the day you get your first pocket money and till the time you leave inheritances for your children. Financial planning also involves estate planning so you can properly plan as to how you want to distribute your assets and liabilities among your children after your death. Its never too early to start with a disciplined life and its never too late even to accept your mistakes.

Ans. Every financial planner works under a process, as laid down by respective financial planning board of the country. And in this process the first step is to establish the relationship between planner and client. A financial planner will give you enough time to get acquainted with the process and formalities. It will always be a no pressure opportunity for you to discuss in details about the goals and other financial issues. After this discussion if you both agree to go ahead then financial planner will get signed a written agreement from you to get you formally into his systems.

Ans. Great!! There’s no point to start the relationship if you don’t value the process in complete. As I explained earlier that financial plan writing is just the beginning of the ultimate process so you won’t be able to understand the value till the time you keep your mind blocked by looking at other people’s plan. Every financial profile is different from others, every risk profile is different, family values are different, Goals and responsibilities are different…so every financial plan is different. Moreover, it depends on the complexities you have already brought or are planning to bring in to your personal finances which will decide the complex structure of financial plan. You may copy other people plan but you won’t be able to bring in the value which is a financial planner’s job.

Ans. As far as basic knowledge is concerned, yes financial planners are equipped with that When they find some complexity in the profile which requires the preparation of some legal documents then they take help from other professionals like CAs or lawyers. And Charge accordingly.

Ans. Financial planners advice on your financial life and the proper asset allocation as per your risk profile. They will discuss on the different asset classes be it equity, debt, real estate and gold and also advice you on products suitable for your profile. They may or may not advice on all product category but they can surely guide you on what is best for your personal finances.

Financial planners don’t run after returns but they focus on your goals. Infact they want their clients also to focus on goals only. With a regular review of the investments and rebalancing the asset allocation they help in generating the optimal returns required to achieve your goals and keep the volatility in line with your risk profile.

Ans. Till date I couldn’t be able to understand what is the definition of enough income. No income is enough if you don’t have control on your expenses. Every one has some financial goals to achieve in life , some are certain and some can be avoided or postponed. Its all about priority. You just have to be disciplined and structured in your savings and spending approach. Financial planning will help you in everything.

Ans. If you truly understand the benefits of financial planning than you will agree that Your profession or business should support your personal life. Financial stress in profession should not bother personal finances and vice versa. Both of these needs to be separate. Your financial planner will help you in separating out the both and guide you through your personal finances.

Ans. Not at all. Writing of financial plan is just a starting point. As your financial position impacted by many internal (personal expenses, desires, health, inheritances, family functions and responsibilities etc.) and external (taxes, inflation, economic and job scenario etc.) factors, so your plan has to be timely reviewed, tweaked upon to make the necessary changes wherever required. Financial planning is a continuos process in which a financial planner will do the handholding and guide you through your financial life as per the financial plan.

Ans. A big part of an effective plan is becoming aware of and addressing the risks that may lie ahead. Insurance helps protect you and your loved ones against catastrophic events. Health insurance, life insurance, disability insurance, auto and home insurance can all be considered in a financial plan. A financial planner can analyze existing policies for their cost effectiveness and benefits to you and your family.

Ans. While your financial planner may make a different recommendation based on your circumstances, it’s a good idea to see him or her twice a year. You should also consider making an appointment in anticipation of life-changing events such as marriage, the birth of a child, divorce, or after inheriting a large amount of money.

Ans. Stay actively involved. Executing on your financial plan is a team approach. If you have someone managing your investments, they should execute on your investment strategy. There will be other things like managing cash flow, opening accounts, and saving or spending at the “planned” levels that will require your active involvement. Communication and follow up with your planner will help you adjust to the bumps (up and down) in your roadmap to maintain the lifestyle you choose.

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