- Financial Planning
- Financial Planners
Essential conditions for Financial Planning to function rightly
1. Determination of measurable economic objectives
Economic objectives should be specific, with regard to what and when the client wants to achieve. As an example, is not enough for the client to report that he wants at some time to live with “comfort”, when he retires or that he wants his children to go to a “good school”, he should determine with precision what exactly he means about “comfort” and “good school” and what are their relevant costs.
2. Objectives should be long-term
It is necessary for a client to formulate, together with his personal Financial Planner, a written financial strategy and faithfully comply with its application. This is very important because even the most qualified Financial Planner cannot change the economic situation of the client within one day.
3. Realistic objectives
Financial Planning is a reasonable approach to managing the finances of a person and aims at achieving specific goals. Uncontrollable factors, such as, inflation, the stock market or interest rates may positively or adversely affect the achievement of someone’s objectives.
It is very important that the goals are realistic and within the framework of the potential of a specific person client in order for them to be achievable.
4. Regular review and revision
Financial Planning is a dynamic process. The financial goals and needs of each may change over time due to changes in lifestyle and other factors, such as, for example, a legacy, a marriage, a divorce, a birth of a child, buying a house or a job change.
Reviewing the economic plans at regular intervals is necessary to adapt in a way to continue to serve long-term goals of a client. It should be understood that even small changes can significantly affect many other areas of life..