What is Financial Planning?









Common Mistakes in Financial Planning
1. Fail to set measurable goals.
2. Make financial decisions without understanding its effects.
3. Confuse financial planning with investing.
4. Forget to re-evaluate financial plans periodically.
5. Think that financial planning is only for wealthy.
6. Think that financial planning is for when they get older.
7. Think that financial planning is the same as retirement planning.
8. Wait for a money crisis to happen before creating a financial plan.
9. Expect unrealistic return on investment.
10. Think that using a financial planner means losing control.
11. Believe that financial planning is primarily tax planning.


What is Financial Planning?
Financial Planning is the process of meeting your life goals through the proper management of your finances.

The process involves gathering relevant financial information, setting life goals, examining your current financial status and coming up with a strategy plan to meet your goals given your current situation and future plans.


How can Financial Planning Help?
Perhaps you are:

  • Looking to start a savings plan
  • Caring for aging parents or young children – (maybe both!)
  • Getting married, or divorced
  • Handling an inheritance
  • Coping with the death of a spouse
  • Facing a financial crisis such as illness or layoff
  • Contemplating charitable donations
  • Confused about how best to insure yourself and/or your family
  • trying to get organized financially


Financial Planning helps you understand how each financial decision you make affects other areas of your finances. For example, buying a particular investment products might help you pay off your mortgage faster or it might delay your retirement significantly. By viewing each financial decision as part of a whole, you can consider its short and long-term effects on your life goals.


What is Financial Planner?
A financial planner is someone who uses financial planning process to help you figure out how to meet your life goals. The planner can look at all your needs including budgeting and savings, taxes, investment, insurance and retirement planning. Or, the planner may work with you on single financial issue but within the context of your overall situation.


How should I Choose a Financial Planner?
While many other advisors/planners in those areas may provide sound advice in one particular area, they do not necessarily meet the standards of the Registered Financial Planner (RFP) Philippines. You need someone who gives full consideration to many disciplines (e.g., taxes, investments, insurance, estates, etc.) that are required in a comprehensive financial planning process. Even if you only need advice in one area, or need a recommendation on what financial product to buy, Registered Financial Planners are committed to your best interests by being process-driven rather than product-driven.


What Questions do I ask Prospective Financial Planners?

  • Does the financial planner have the RFP designation?
  • Does the financial planner belong to the Registered Financial Planner Philippines?
  • What are the planner’s areas of expertise?
  • Does the planner have criteria for new clients, such as an income or asset level?
  • Will you be dealing primarily with the planner or an assistant?
  • How is the planner compensated and what is an estimate of fees for your situation?
  • Does the planner feel that you need a comprehensive financial plan or a modular plan?
  • What documentation can you expect and how many times will you meet in person?
  • Does the planner sell investments and other financial products, and if so, what is the scope of products he/she sell?
  • Are you free to implement the planner’s recommendation else where if you choose?
  • Is the planner willing to provide you with reference?

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