- Financial Planning
- Financial Planners
Goals that can be achieved through Financial Planning, may include future purchases such as new home, boat or car, travel, finance a new business or meet children’s studies. Other goals may be, to ensure adequate protection of personal risk (such as unemployment, disability, death, medical expenses, loss of property and economic independence), to cover the pension needs and reduce costs in the distribution of property client to his heirs.
As the achievement of objectives requires usually disciplined saving and investment there, the right investment strategy should be such that the client would achieve its objectives within the framework of the investment risk that he is able and willing to undertake.
The customer may invest funds for retirement, funding the education of children, starting a new job or buying a home. He probably has many goals and each of these objectives may need a different type of investment strategy.
The time that one has to reach his economic destination is one of the most important factors that will determine who is the most effective way to get there. The more time someone has to grow his investment, the more likely it is to achieve his objectives. A short-term time horizon may require a more conservative approach, while a long time horizon allows for a more aggressive approach because the customer has more time to endure the periodic market crises.
It is important that the design of investment is consistent with the investment risk that the client is willing to take. The more investment risks he is willing to take, the greater the potential for investment gains. The resistance to risk requires some knowledge of financial markets and a sincere understanding of what risk is willing to undertake.
The Financial Planner provides you with the information required for different investment options. The determining factor that will affect the division of the client’s investment capital is the current economic situation and the size of the client’s property. A Financial Planner before deciding on any investment strategy takes into account the overall economic picture of the client.
With the proliferation of client’s investment among different types of investments, the investment risk is minimized because the consequences of a decline in a specific bond or a share are substantially reduced.
A dispersion of aggressive investments may include a high percentage in equities or equity mutual funds for high earning prospects. A more conservative investment allocation of the client will have a lower percentage of shares and a higher percentage of high-interest bonds and deposits.
The dispersion of the client’s investments is based on four factors: time horizon, tolerance to risk, desired liquidity and current economic situation – a combination of conditions which are unique to each investor. A Personal Financial Planner will help identify the most effective dispersion of the client’s investment in order to meet his financial goals.
As investment grows and changes its value, a change of the composition of the portfolio might be needed. As objectives, age, economic status of the customer and markets change, the dispersion of investment should be revised. A Financial Planner will review the client’s portfolio and help to balance or change his investment.
The effective investment decisions are part of a comprehensive economic plan. The smartest way to achieve the economic objectives is through planning, discipline, patience and time. The timely and proper planning has only benefits.
The Personal Financial Planner is a valuable source of information that helps’s clients to explore investment options in some complex investment issues.
For more information on how the investment planning can compensate you, contact a Financial Planner of HFPA. The Hellenic Financial Planners Association can provide you with a list of Financial Planners in your area. The Financial Planners who belong to the HFPA meet top quality standards and professionalism..