Scope of Financial Planning Services

• Evaluating client’s current financial position, Income from all sources, expenses, assets, liabilities and net worth.
• Trade-off between investing money and paying-off loans: Should you invest your surplus money or use it to repay outstanding loan? A financial planner would look into all aspects and advise the right allocation towards reducing the loan burden as well as towards investment.
• Strategies to get rid of debt(loan) faster: A Financial Planner will plot a strategy after careful evaluation of financial needs, goals, sustainability of surplus income and the client’s personality.
• Contingency planning: Creating and maintaining an emergency fund to deal with any financial emergency like job or income loss, medical exigencies or disabilities.
• Determination of Financial Goals: A financial planner will help you identify what has worked well for you, what you want to accomplish, all your aspirations and responsibilities and convert them into a short term, medium term and long term financial goal. The financial planner will also help you with priority, time-horizon and return expectation for achieving each financial goal.
• Investment planning: Investment planning is aligning your financial goals with your investments. Based on the sensitivity, priority, time-horizon and return expectation for achieving each financial goal, the financial planner makes potential investment strategies and suitable asset allocation. The financial planner considers the risk bearing capacity of the client before suggesting the investment options. The planner also evaluates the advantages and disadvantages of each investment option and their alternatives.
• Evaluation of investment alternatives: The evaluation is for recommending the most suitable investment option after Comparing the advantages and disadvantages of various investment options and their utility in current situation. The below are some of the examples.

1. Mutual Funds vs Portfolio Management Services
2. Direct Stock Investing vs Equity Mutual Funds
3. Actively Managed Equity Funds vs Index Funds
4. ETFs vs Index Funds
5. Mutual Funds Vs ULIP
6. ELSS vs other tax saving instruments (FD, PPF, Life Insurance Policies)
7. Physical Gold vs gold ETF vs Sovereign Gold Bonds
8. Bonds and Debentures vs Debt Funds
9. Fix deposits vs Debentures
10. Whether to lease or buy an asset

• Risk Management and Insurance: The financial planner help the client to take proactive decisions to minimize the loss in the event of risk or suggest to transfer the risk. Insurance is used to transfer the risk.
• Need analysis for Life insurance coverage: The financial planner calculates the financial value of all the living expenses till the survival of the last spouse, crucial life goals like children education, buying a house etc and the current liabilities (loans) to arrive at the exact life cover required and till what age. This will ensure the adequate life cover and reduce the cost of premium.
• Health Insurance, Assets coverage and liability cover: The financial planner takes a complete overview of a client’s situation, his/her occupation, businesses, health issues, potential liabilities etc and sensitizes client about the potential financial risk. The planner suggests appropriate risk management measures like Health Insurance, personal accidental insurance, professional indemnity etc. The planner also evaluates alternative strategies before suggesting measures like Critical illness policy vs Critical illness rider Personal Accident policy vs Accidental death and disability rider

• Retirement Planning: Retirement as a goal needs the highest funding among all other goals. An insightful financial planner strikes the right balance of funding the retirement goal without disturbing the funding of various other goals like children education, vacation, a farmhouse etc.
• Retirement objectives: A financial planner through a meaningful interaction, both with the client and his/her spouse, determine the true objectives of retirement like living expenses, pursuing hobbies, travel, charity, gifting etc and designs the right structure of retirement.
• Personal and economic indicators of retirement: A financial planner in consultation with client determines the desired retirement age, the life span after retirement, the rate of inflation during both pre and post retirement and finally the average return that the client would obtain while accumulating funds as well as during the retirement phase. With the help of these indicators the planner can come to a conclusion regarding retirement corpus required and the withdrawal strategy from the retirement corpus.
• Analysis of Retirement products: The crucial test of retirement plan is first to achieve the planned retirement corpus and then sustenance of retirement income till the lifetime of the last surviving spouse. Various retirement products are available to accumulate retirement corpus like EPF, NPS or other employer managed provident funds which are statutory retirement products. Other retirement products are government schemes like PPF, retirement schemes of mutual funds, equity mutual funds, insurance linked pension plans etc. The products available for regular retirement income are superannuation benefits, annuity plans from insurance companies, government sponsored schemes like SCSS or POMIS and SWP from retirement schemes of mutual funds or equity mutual funds. The financial planner after careful evaluation of all the products choose the suitable accumulation products as well as retirement income products to avoid dependence of client on a single product.
• Tax Planning: Tax planning is the analysis of one’s financial situation from a tax efficiency point of view. Tax planning is a legal way of reducing your tax liabilities in a year. It will help you to utilise the tax exemptions, deductions, and benefits in the best possible way for minimising your tax burden. It also evaluates which Tax regime is more beneficial for the client, the old tax regime which allow all the exemptions and deductions or the new tax regime with lower slab rates.
• Tax Compliance & Tax liability on liquidation of Assets: It is important for client to comply with all schedules like paying advance taxes, filling returns by due date etc. The non-compliance not only leads to hefty penalties but also spoils the tax compliance history. The financial planner has up to date knowledge of Tax laws and about tax saving products regarding their lock in period to understand till when the money will be blocked, the tax liability on maturity and whether the post-tax real returns is viable enough to achieve the financial goals.
• Bias towards tax saving investments: The clients have a general tendency to save as much income tax as possible, in the bargain client takes over exposure in the tax saving products with low returns or returns which are less than inflation like buying the life insurance. The financial planner helps the client to avoid over exposure in such tax saving products and suggest investments in other tax saving products having better long-term returns. The planner also helps the client to take the decision whether to pay taxes or to make tax saving investments.
• Legacy Planning / Estate Planning: The common Estate planning Goal is to ensure that all your assets Physical, financial and online are distributed among your loved ones as per your wish and avoid disputes among the family members after you. Estate planning also include planning for potential incapacity. The financial planner with the help of other professionals uses the tools like Nominations, Joint holdings, will, trust, Power of Attorney, Health care or medical directive etc to ensure that provisions are made to handle every circumstances.