The first module of this course will prepare you for the tasks that a financial planner would need to undertake. You will learn how to implement the financial planning process taking into account the various environmental factors that could affect the plan. You will also learn to understand potential client goals and how you can help them to achieve these. There will be an insight to some basic financial management tools as well as some information on regulations that govern the financial planning domain.
- The Six Step Financial Planning Process
- Financial Management – General Principles and Behavioural Finance
- Financial Mathematics
- FPSB India’s Financial Planner Code of Ethics, Professional Responsibility and Model Rule of Conduct
- Regulatory Environment Related to Financial Planning
The Six Step Financial Planning Process (4 Marks)
The six step financial planning process outlines the steps that a financial planner should go through with their client to produce an actionable strategy that suits the client’s goals and financial situation.
- Step One – Establish and Define the Relationship with the Client
- Step Two – Collect Client’s Information
- Step Three – Analyse Client’s Financial Status, Risk Profile and Determine Financial Goals
- Step Four – Develop Financial Planning Recommendations and Present them to the Client
- Step Five – Implement Client’s Financial Planning Recommendations
- Step Six – Monitor and Review the Client’s Situation
Financial Management – General Principles and Behavioural Finance (7 Marks)
(I) Brief Overview to Financial Markets
Many monetary markets will be introduced including capital markets, money markets, FOREX and more.
(II) Debt Management
You will be introduced to the various types of debt that a client may have accumulated and the methods that should be used to manage and reduce these.
(III) Personal Financial Statement Analysis
A variety of financial analysis tools will be introduced to give a realistic representation of a client’s financial situation.
(IV) Forms of Business Ownership/Entity Relationships
The many forms of business ownership will be introduced with some insight into the financial advantages and disadvantages of these will be outlined.
(V) Concepts in Behavioural Finance
Behaviour has a large impact on the success of a financial plan; four theories will be introduced to display some common financial behavior and their impacts on the market.
(VI) Behavioural Finance – Investor Psychology
Investments are subject to an estimation of a stock/share’s future value; estimations are often biased to an individual’s emotional attachment to the investment. This section will explore the role of emotions in financial decision making.
(VII) Economic Environment Analysis
The economy is consistently affected by a number of external forces including supply & demand, inflation, government policies and much more…
3. Financial Mathematics (12 Marks)
(I) Calculation of Returns
The following section outlines various ‘rate of return’ applications that are available on different investment types including compounding interest, annual growth rates, and many others.
(II) Time Value of Money
The value of money changes over time, based on the historic change in value we can estimate how much a sum of money will be worth at a certain point in the future.
(III) Loan Calculations
This section will outline how to analyze and manage loans including the method for creating loan repayment schedules.
(IV) Total Assets, Net Worth and Financial Ratios
Analysing net worth over time is an important measurement of a client’s financial success. This section will show how to calculate net worth using assets and liabilities.
4. FPSB India’s Financial Planner Code of Ethics, Professional Responsibility and Model Rule of Conduct (4 Marks)
(I) The Code of Ethics and Professional Responsibility
(II) Ethical and Professional Considerations in Financial Planning
5. Regulatory Environment Related to Financial Planning (3 Marks)
(I) Regulations Relating to Individuals
(II) Function, Purpose, and Regulation of Financial Institutions