The ABC of financial planning

Transcription

1 The ABC of financial planning

2 A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life. - Suze Orman

3 Do I really need financial planning? Every person who earns a salary or receives an income should make sure that his or her finances are on course for what he or she wants from life. Are you saving enough for retirement? Will you be able to maintain your lifestyle if a medical crisis occurs? And what if something happens to your possessions? Are you saving enough for what you want in the long term, such as a savoured dream or your children s education? In addition to getting the basics right, you must keep your overall financial wellbeing in mind. Are you financially healthy for your particular phase of life? I know the basics of finance. Do I still need advice? Bear in mind that there are thousands of financial products in the industry, and some can be very complicated. Actuarial calculations are needed to make sure that you are making enough provision. And do make sure that you are able to make unemotional decisions about your own money. So yes, an accredited financial planner with the right technical financial needs-analysis skills is vital in creating long-term financial wellness. If you visit the Momentum website, momentum.co.za, you can register and use our financial wellness tools to show you where there might be gaps in your financial portfolio. But what if it is still early in my career? The best time to start planning and shaping your financial future is at the very outset of your career. The power of compound interest the fact that not only your original investment amount grows, but that there is growth on that growth too is what Einstein called the eighth wonder of the world.

4 What will a financial planner do for me? A financial planner is trained to look at each client individually and to then give advice that will improve the person s financial wellbeing. The advice needs to be adjusted as a person s life circumstances change too. How do I know if a financial planner is right for me? You must feel comfortable discussing personal details with the planner, as, for example, buying major assets and particular medical problems may demand very open discussions. You will have to be honest about what you spend your money on, and what you want to spend your money on. Discussing a will is also a personal but extremely important step. How do I make sure that the financial planner is credible? All our planners passed Financial Services Board exams, according to the category of products they sell. They are registered with the Board and can show you proof of registration. How do I prepare for a discussion about money matters? A financial planner from Momentum will talk you through the process. We will assist you in drawing up a detailed budget, a list of your assets and a detailed list of your financial needs. We will then match your budget and needs.

5 What can I expect during the financial advice process? Financial planning generally entails six steps. 1. Financial planner establishes relationship with client The planner starts out by informing you of the services he or she is able to provide. This includes telling you what services he or she is accredited to give. The planner will explain that he or she is from Momentum and will recommend Momentum products only. 2. Setting objectives The financial planner must establish what you want to achieve on your financial wellness journey. He or she will ask questions about your goals, as well as permission to gather data on products you already own. He or she will also ask about your existing assets and how you feel about risk. This will determine where you should invest. 3. Analysing your financial status 4. Develop and present financial plan After your current situation has been assessed, the financial planner will make recommendations as to how you can improve your situation. This will include alternatives and comparisons with similar products. 5. Implement a financial plan The planner takes instructions from you about the options you have chosen. It is always advisable to give instructions in writing. 6. Monitor recommendations Your financial situation is never static and you will need ongoing advice. Please make sure that you see your financial planner at least once a year or when anything major changes in your life. This is the best way to ensure lifelong financial wellness. The financial planner will now analyse the data received in the second step. This is to identify any gaps in your financial make-up and where opportunities may lie.

6 Does Momentum have a financial planner for me? Phone our call centre at or visit our website, Click on Contact us and then on the link Get a financial planner to contact me in the white block in the bottom right hand corner of the page if you want us to recommend one of Momentum s financial planners. MMI Group Limited West Avenue Centurion 0157 PO Box 7400 Centurion 0046 South Africa Tel +27 (0) Share Call Reg. No. 1904/002186/06 Momentum, a division of MMI Group Limited, an authorised financial services and credit provider September 2014