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Financial Planning
Source:
Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority and you can order
it here)
Personal financial planning
involves the evaluation of a person's current financial position and financial
goals leading to a presentation of a plan to achieve those goals.
A typical financial plan includes the following:
-
A balance sheet analysis
-
Projection of cash flow
-
Long-term accumulation plans
for retirement, education, etc.
-
Statement of individual's
goals
-
Insurance analysis
-
Estate and tax planning
-
Projection of income taxes
-
Overview of weaknesses and
strengths in the individual's financial outlook
-
Recommendations for implementing
the plan
Financial planners
charge clients in one of three major ways:
a fee-only basis, a fee-and-commission basis, or on a commission
basis.
Currently two professional
organizations accredit planners after they have completed certain educational
and professional requirements: The
College for Financial Planning confers the Certified Financial Planner
(CFP) and the American College confers the Chartered Financial Consultant
(ChFC) designation. Two major
professional organizations are associated with financial planning: the International Association for Financial Planning and the
Institute of Certified Financial Planners.
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