The Financial Planning Process Step: · Web view2015/08/23 · The financial planner should then...

AOF Financial Planning

Lesson 2Introduction to Financial Planning

Student Resources

Resource Description

Student Resource 2.1 Vocabulary Activity: Financial Planning Terms

Student Resource 2.2 Answer Key: Financial Planning Terms Activity

Student Resource 2.3 Example: Sales Manager Job Description

Student Resource 2.4 Note-Taking Guide: The Financial Planning Process

Student Resource 2.5 Reading: The Financial Planning Process

Student Resource 2.6 Assignment: Writing a Job Description

Student Resource 2.7 Descriptions: Interview Roles

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AOF Financial PlanningLesson 2 Introduction to Financial Planning

Student Resource 2.1

Vocabulary Activity: Financial Planning TermsStudent Name:_______________________________________________ Date:___________

Directions: Fill in as many of the definitions as you can for the terms below.

What do you think it means? Were you correct?

Cash Management

Investments

Tax Planning

Asset Allocation

Risk Management

Retirement Planning

Estate Planning




Example: Sales Manager Job Description

SUMMARY

The sales manager is responsible for overseeing all aspects of sales in his or her assigned region, including identifying potential customers, managing the customer database, and conducting sales calls.

PRIMARY RESPONSIBILITIES Research potential sales prospects in the region

Identify strategies for generating customer leads and referrals

Maintain relationships with current customers

Follow up on new leads and referrals resulting from field activity

Create sales materials, including brochures, advertisements, and so forth

Prepare presentations and proposals for sales leads

Other duties as assigned

ADDITIONAL RESPONSIBILITIES Assist research and development department in gathering customer feedback

Facilitate new product focus groups

Train new sales employees

KNOWLEDGE AND SKILL REQUIREMENTS Great customer relations skills

Strong public speaking skills

Knowledge of the industry

Demonstrated ability to create persuasive reports and presentations

EDUCATIONAL REQUIREMENTS College diploma highly preferred

High school diploma

WORKING CONDITIONS Requires travel 60% of time, including significant air travel

Must be able to lift up to 60 pounds




Note-Taking Guide: The Financial Planning ProcessStudent Name:_______________________________________________ Date:___________

Directions: Use the following note-taking guide to help you organize the information that you learn from the presentation on the financial planning process. For each of the following six steps listed on the left, use the column on the right to describe the duties involved. You must list two to three duties and/or expectations that are required of a financial planner for each step of the financial planning process.

The Financial Planning Process Step:

The Financial Planner’s Duties in This Step:

Establish the client–planner relationship

Gather client data and establish financial goals

Analyze data

Develop a plan for achieving goals

Implement the plan

Monitor the plan




Reading: The Financial Planning Process

Because every client is unique, it is important for financial planners to follow a series of steps to ensure that the client’s needs are being met.



Fundamentally, the financial planning process consists of six client-centered steps that repeat during the course of the relationship between financial planners and their clients. Financial planners should check with their clients periodically to make sure the financial plan they created together doesn’t need adjustments based on changes in finances, altered goals, or other factors.



The first step in the financial planning process is for the financial planner to establish a relationship of trust with the client. Because financial planners deal with some very personal information, it is important for clients to trust their financial planner. Clients must feel confident with the financial planner’s industry expertise as well as his or her commitment to keep the clients’ private information confidential.

Financial planners must be able to advise, counsel, and listen to the needs of their clients. Most clients are concerned with financially emotional issues, such as education funding, debt, retirement, and premature death. Most clients express concern and anxiety over these topics and often don’t know how to use financial goals to address these concerns. Financial planners must be good listeners; they must ask the right questions to learn what financial issues clients are most concerned about and to help them prioritize their needs.

Financial planners use a variety of methods for getting to know their clients better. Not only will they have meetings with the client on the phone and/or in person, but they will also use fact-finding forms, counseling techniques, and questionnaires to get to know their clients. Financial planners must also explain the services they will be providing to the client and the compensation they will receive for those services.



The second step in the financial planning process involves gathering relevant data and establishing realistic and appropriate financial goals for the client.

There is an amazing amount of data that needs to be gathered before a financial planner can help clients work towards their goals. The information must be up to date and accurateotherwise the financial plan will not accomplish the client’s goals. Examples of data to be gathered include a list of annual income and expenditures, tax returns, insurance policies, bank statements, brokerage accounts, and any other financial statements that enable the financial planner to have a clear understanding of the client’s current financial situation.

Once the data is gathered, financial planners should begin working with clients to discuss the necessary steps for helping them achieve their financial goals. Financial planners must encourage their clients to express their financial concerns, hopes, and desires. The financial planner should then restate the goals in specific, measurable, attainable, and time-bound terms. This is one of the most important parts of the goal-setting process. Financial planners must question clients and review their financial data to learn exactly what they are trying to accomplish.



Once the financial planner has gathered all of the client’s data and has set realistic financial goals, the financial planner then must analyze the data to make sure that the goals are realistic and achievable. This process takes time and involves an intensive and methodical analysis of the client’s financial situation. Sometimes goals must be reevaluated and adjusted based on the analysis. For example, the client may have to postpone retirement, hold off on making large purchases, or start aggressively tackling debt.



The financial plan should describe the financial planner’s findings and recommendations. Financial planners must remember that the goal of the plan is to communicate to clients exactly how their goals will be achieved. Its format and content should be easily understood and specific, and it should accurately describe the strategies that will be used to best meet clients’ needs.

Most financial plans should address each one of the following major planning areas: insurance planning, risk management, employee benefits planning, investment planning, income tax planning, retirement planning, and estate planning. It is not uncommon for a financial planner to consult with other experts to help create and implement the financial plan.

Keep in mind that although financial planners should base the plan on the clients’ financial goals and the specific strategies for achieving those goals, planners also have a responsibility to make clear to their clients alternative ways for them to meet their financial goals, as each strategy has its own advantages and disadvantages that the clients should be aware of.



Part of a financial planner’s job is to make sure that the plan is successfully put into action. Sometimes additional professional expertise is needed to carry out the plan—for example, a plan might require the review and advice of an estate planning specialist. Part of the financial planner’s duties is to make sure that the appropriate professional experts are consulted to see that the complete financial plan is carried out.

Once the financial plan has been implemented, the work of a financial planner is not over. He or she must periodically monitor the performance of the client’s plan and evaluate whether it can be improved. He or she should review changes in the client’s circumstances as well as changes to external factors that might affect the client’s financial plan.




Assignment: Writing a Job DescriptionStudent Name:_______________________________________________ Date:___________

Directions: Use this planner to record what you learn from the interview with a business professional, making sure you get information in each category—ask questions if you need to. Then use the information you’ve gathered and refer to the assessment criteria at the bottom of the resource as you write your job description.

Primary responsibilities

Additional responsibilities

Knowledge/skills requirements

Educational requirements

Working conditions

Make sure your assignment meets or exceeds the following assessment criteria: The job description describes the primary and additional responsibilities in a detailed and accurate

manner.

The job description describes the required knowledge areas and skills in a detailed and accurate manner.

The job description describes the educational requirements in a detailed and accurate manner.

The job description is written neatly in complete sentences and uses proper spelling and grammar.




Descriptions: Interview RolesDirections: Read the descriptions of the interview role your teacher assigned you.

Greeter Make sure the guest has a comfortable place to sit that is visible to the whole class.

Welcome the guest at the school office or at the classroom (see teacher for directions).

Escort the guest to his or her chair.

Escort the guest out at the end of the interview.

Master of Ceremonies (Emcee) Kick off the interview by briefly describing the course and the purpose of the interview.

Call on students who raise their hands with questions.

Keep your eye on the time, and end the interview 10 minutes before the class ends.

Thank the guest for his or her participation and ask the class for applause.

Scribe When terms come up in the interview that are difficult to spell, write them on the board, asking the

guest for the correct spelling.

You are also responsible for writing a thank-you note to the guest. The teacher will provide a card, envelope, stamp, and the guest’s address.

Audience Member Show the interview subject respect: listen carefully, look at the guest, and refrain from distracting

him or her by making unnecessary sounds or movements.

Raise your hand and wait patiently to be called on to ask a question. Expect that not everyone will get called on.

Write down key information about the answers the guest gives.


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