Financial Planners
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A financial planner or personal financial planner is a qualified financial advisor. Practicing in full service
personal finance Personal finance is the financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events. When planning personal fi ...
, they advise clients on investments, insurance, tax, retirement and estate planning. As a general rule, a financial planner’s work can: * integrate into the range of professional services (eg:
lawyer A lawyer is a person who practices law. The role of a lawyer varies greatly across different legal jurisdictions. A lawyer can be classified as an advocate, attorney, barrister, canon lawyer, civil law notary, counsel, counselor, solic ...
,
accountant An accountant is a practitioner of accounting or accountancy. Accountants who have demonstrated competency through their professional associations' certification exams are certified to use titles such as Chartered Accountant, Chartered Certifi ...
); or * integrate into the offer of a range of financial products and services (eg: financial advisor,
insurance agent Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
); or * not be integrated into other products or services, providing stand alone
financial planning In general usage, a financial plan is a comprehensive evaluation of an individual's current pay and future financial state by using current known variables to predict future income, asset values and withdrawal plans. This often includes a bu ...
.


Scope

Financial planning should cover all areas of the client's financial needs and should result in the achievement of each of the client's goals as required. The scope of planning would usually include the following: * Risk management and insurance planning: managing cash flow risks through sound risk management and insurance techniques * Investment and planning issues: planning, creating and managing capital accumulation to generate future capital and cash flows for reinvestment and spending, including managing for risk-adjusted returns and to deal with inflation * Retirement planning: planning to ensure
financial independence Financial independence is the status of having enough income or wealth sufficient to pay one's living expenses for the rest of one's life without having to be employed or dependent on others.Cummuta, John. The Myths & Realities of Achieving Fina ...
at retirement including 401Ks, IRAs etc. * Tax planning: planning for the reduction of tax liabilities and the freeing-up of cash flows for other purposes * Estate planning: planning for the creation, accumulation, conservation and distribution of assets *
Cash flow A cash flow is a real or virtual movement of money: *a cash flow in its narrow sense is a payment (in a currency), especially from one central bank account to another; the term 'cash flow' is mostly used to describe payments that are expected ...
and liability management: maintaining and enhancing personal cash flows through debt and lifestyle management


Process

The ''personal financial planning process'' is described in ISO 22222:2005 as consisting of six steps: # Establishing and defining the client and personal financial planner relationship # Gathering client data and determining goals and expectations # Analysing and evaluating the client's financial status # Developing and presenting the financial plan # Implementing the financial planning recommendations # Monitoring the financial plan and the financial planning relationship


Licensing, regulations and self-regulation

In many countries, there are no requirements (no legal framework) regarding the use of the title of 'financial planner'. The scope of the title "financial planner" varies from one jurisdiction to another. The legal framework of the profession may include: * a reserved title (eg: PFA-certified financial planner, CFP, financial planner): the protection of the title ensures that the services are provided by accredited persons meeting ethical standards; * reserved activities: as a general rule, the asset planning activity is shared between several professions; * compulsory basic and continuing training: the training requirements of financial planners ensure updating of skills; * professional liability insurance; * a compensation fund; * a supervised service offer; * supervised instrumentation; * an obligation of written mandate before delivering a professional service.


Australia

In Australia, financial advisors must be authorised under an Australian Financial Services licence holder to provide financial product advice. The licence holder must obtain a licence from the
Australian Securities and Investments Commission The Australian Securities and Investments Commission (ASIC) is an independent commission of the Australian Government tasked as the national corporate regulator. ASIC's role is to regulate company and financial services and enforce laws to pro ...
(ASIC). The ASIC website states that "Holding an AFS licence does not provide a guarantee of the probity or quality of the licensee's services." There has been recent reforms to the licensing of financial advisors in Australia as a result of several scandles involving things such as inadequate or improper advice and fees charged to clients for no service. From 1 January 2019, new education and training standards apply to financial advisers these standards include undertaking approved post graduate study, passing a national accredited examination and undertaking continuing professional education. New entrants to the industry have additional requirements.


Belgium

In
Belgium Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to th ...
, advice in this area is regulated by the law of 25 April 25, 2014 relating to the status and control of independent financial planners and to the provision of planning consultations by regulated companies. Notaries, lawyers, accountants and auditors are however not targeted. The law uses the term "financial planning", which creates an amalgamation between two disciplines.


Canada

In Canada, "financial planners" are unregulated in every province except Quebec, where only individuals holding the ''Planificateur Financier'' (Pl.Fin / F.Pl.) designation are allowed to use the title "Financial Planner" and offering financial planning services. Outside of Quebec, there are currently no restrictions, no
educational Education is a purposeful activity directed at achieving certain aims, such as transmitting knowledge or fostering skills and character traits. These aims may include the development of understanding, rationality, kindness, and honesty. Vari ...
prerequisites, and no licensing requirements for individuals calling themselves financial planners, or for businesses using "financial planning" in their name or services offered. , Ontario and Saskatchewan have introduced
legislation Legislation is the process or result of enrolled bill, enrolling, enactment of a bill, enacting, or promulgation, promulgating laws by a legislature, parliament, or analogous Government, governing body. Before an item of legislation becomes law i ...
to regulate financial planning titles, but the legislation has yet to be enacted. Many financial advisors in
Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
call themselves financial planners yet only hold licences to sell personal financial products (primarily investments and insurance), or use non-expiring qualifications with no monitoring or public accountability process (such as the ''Personal Financial Planner'' / PFP designation). There are only two publicly monitored and fully regulated financial planning designations outside of Quebec the CFP (''Certified Financial Planner'') and the R.F.P. ( ''Registered Financial Planner''), designations. The R.F.P. is the older (established in 1987) and more stringent of the two
publicly In public relations and communication science, publics are groups of individual people, and the public (a.k.a. the general public) is the totality of such groupings. This is a different concept to the sociological concept of the ''Öffentlichkei ...
monitored designations. All R.F.P.s must first demonstrate their competency, then abide by a code of
ethics Ethics or moral philosophy is a branch of philosophy that "involves systematizing, defending, and recommending concepts of right and wrong behavior".''Internet Encyclopedia of Philosophy'' The field of ethics, along with aesthetics, concerns m ...
and adhere to rigorous practice standards as defined by the granting body, the ''Institute of Advanced Financial Planners'' (IAFP). Every R.F.P. must attest each year that financial planning is their primary vocation. In Quebec The title of financial planner (F.P.) or planificateur financier (Pl.Fin.) is a professional title used in
Quebec Quebec ( ; )According to the Canadian government, ''Québec'' (with the acute accent) is the official name in Canadian French and ''Quebec'' (without the accent) is the province's official name in Canadian English is one of the thirtee ...
(
Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
). This Quebec title applies to a person who graduated from the
Institut québécois de planification financière The Institut québécois de planification financière (IQPF) is a not-for-profit organization that awards the Financial Planner (F.Pl.) diploma in Quebec (Canada) and administers the Autorité des marchés financiers (AMF)'s regulation relating t ...
program and then supervised by a regulatory body authorized by provincial law: the Chambre de la sécurité financière, the
Ordre des Administrateurs Agréés du Québec The Ordre des administrateurs agréés du Québec (''English: Chartered Administrators Order of Quebec'') (Adm.A.) is a professional Order mandated by the Government of Quebec (Canada) to regulate the practice of the "Administrateurs agréés" (En ...
(in English: Order of Chartered Administrators of Quebec) or the
Ordre professionnel des comptables professionnels agréés du Québec A suite, in Western classical music and jazz, is an ordered set of instrumental or orchestral/ concert band pieces. It originated in the late 14th century as a pairing of dance tunes and grew in scope to comprise up to five dances, sometimes with ...
(in English: "Professional Order of Chartered Professional Accountants of Quebec"). At the end of his basic training, the “Financial Planner” (Pl.Fin.) is qualified to exercise the activity of “financial planning” of the asset type. In addition, the Professional Orders participating in the supervision of the title of “Financial Planner” have developed more extensive practice models comprising all the components of asset administration. The generally recognized practice model of this profession normally excludes organizational-type financial planning (eg: companies, organizations, governments). In the
province of Quebec Quebec ( ; )According to the Canadian government, ''Québec'' (with the acute accent) is the official name in Canadian French and ''Quebec'' (without the accent) is the province's official name in Canadian English is one of the thirteen p ...
, this title is granted by the regulatory bodies that oversee this professional practice, namely the AMF ( Autorité des marchés financiers) and the Participating professional orders:
Ordre des Administrateurs Agréés du Québec The Ordre des administrateurs agréés du Québec (''English: Chartered Administrators Order of Quebec'') (Adm.A.) is a professional Order mandated by the Government of Quebec (Canada) to regulate the practice of the "Administrateurs agréés" (En ...
and the
Ordre professionnel des comptables professionnels agréés du Québec A suite, in Western classical music and jazz, is an ordered set of instrumental or orchestral/ concert band pieces. It originated in the late 14th century as a pairing of dance tunes and grew in scope to comprise up to five dances, sometimes with ...
.The Professional Orders participating in the framework of the Pl.Fin. worn by their members, must enter into an agreement with the AMF. The following Orders have ceased to regulate the title Pl.Fin. supported by several of their members: the
Order of general accountants licenciés du Québec Order, ORDER or Orders may refer to: * Categorization, the process in which ideas and objects are recognized, differentiated, and understood * Heterarchy, a system of organization wherein the elements have the potential to be ranked a number of ...
because of the merger in 2012 of the three accounting orders (CA, CGA and CMA) and the
Chambre des notaires du Québec The ''Chambre des notaries du Québec'', or Chambre of Notaries of Quebec, is the regulatory body for the practice of notaries in the province of Quebec and one of two legal regulatory bodies in the province. Founded in 1870 as the Provincial Cham ...
which did not renew their agreement with the AMF.
The
Institut québécois de planification financière The Institut québécois de planification financière (IQPF) is a not-for-profit organization that awards the Financial Planner (F.Pl.) diploma in Quebec (Canada) and administers the Autorité des marchés financiers (AMF)'s regulation relating t ...
(Quebec Financial Planning Institute) (IQPF) is the only organization in
Quebec Quebec ( ; )According to the Canadian government, ''Québec'' (with the acute accent) is the official name in Canadian French and ''Quebec'' (without the accent) is the province's official name in Canadian English is one of the thirtee ...
authorized to award the diploma of "financial planner". The IQPF establishes the rules relating to basic training to gain access to the title of Financial Planner. In addition, the IQPF administers the AMF regulations on compulsory continuing education for financial planners subject to the AMF (Autorité des marchés financiers). In addition, the Professional Orders framing the Financial Planner title are responsible for the continuing education of their Pl.Fin members. The Quebec title of "Financial Planner" (Pl.Fin.) Is the only one among the other homonymous titles in
Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
which does not include an accreditation qualifier. The Institut québécois de planification financière (IQPF) and the Financial Planning Standards Council (FPSC), the two organizations that oversee the profession of financial planner have developed the reference document Financial planning in Canada: definitions, standards and skills. This presents, among other things, the seven areas of intervention of financial planning, namely the legal aspects, insurance and risk management, finances, taxation, investments, retirement as well as estates.


India


Malaysia

The
Securities Commission Malaysia The Securities Commission Malaysia ( ms, Suruhanjaya Sekuriti Malaysia) is a Malaysian statutory body with responsibility for development and regulation of capital markets in the country. It is located in Bukit Kiara near the National Science Ce ...
introduced legislation through amendments made to the Securities Industry Act in 2003 to regulate financial planning and the use of the title or related-title of 'financial planner' or to conduct activities related to financial planning. In 2005, amendments to the Malaysian Insurance Act require those who carry out financial advisory business (including financial planning activities related to insurance) and/or use the title of financial adviser under their firm (which, like in Singapore, must be a corporate structure) to obtain a license from
Bank Negara Malaysia The Central Bank of Malaysia (BNM; ms, Bank Negara Malaysia) is the Malaysian central bank. Established on 26 January 1959 as the Central Bank of Malaya (''Bank Negara Tanah Melayu''), its main purpose is to issue currency, act as banker and ad ...
(BNM). Some persons who offer financial advisory services, e.g., licensed life insurance agents, are exempted from licensing as a practising requirement.


Singapore

In
Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, borde ...
, financial services are highly regulated by The
Monetary Authority of Singapore The Monetary Authority of Singapore (MAS) is the central bank and financial regulatory authority of Singapore. It administers the various statutes pertaining to money, banking, insurance, securities and the financial sector in general, as well ...
(MAS), the regulator and supervisor of financial institutions in Singapore. Rules are set by MAS for financial institutions and are implemented through legislation, regulations, directions and notices. Currently, the majority of the financial planners (financial consultants) are commission-based, which may cause a
conflict of interest A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates to situations i ...
related to the products recommended. In 2015, a balanced scorecard framework was implemented to better align the interests of the FA industry and consumers. This ensures FA representatives and supervisors meet key performance indicators that are not related to sales, such as providing suitable product recommendations and making proper disclosure of material information to customers (Non-Sales KPI). Failure to achieve good grades for the Non-Sales KPI will directly affect their commission (variable income).


New Zealand

The Financial Markets Authority (FMA) (formerly the Securities Commission) provides Authorisation to individuals who provide Personalised Financial Advice, Investment Planning Services and/or Discretionary Investment Management Services. Individuals who receive authorisation are referred to as an Authorised Financial Adviser (AFA). In order to receive authorisation, individuals must complete the National Certificate in Financial Services (Financial Advice) (Level 5).


See also


References

{{DEFAULTSORT:Financial Planner Finance occupations Retail financial services Financial planners