What’s A Financial Planner?
The architect builds your home. Your teacher moulds your mind. Your lawyer gives you legal advice and protection. And your doctor takes care of your health.
But who takes care of your financial health? Each professional—the doctor, the lawyer, the teacher, the dentist, the architect—all of them has studied and trained in their own field of specialization to provide for our own specific needs and that of our society as a whole.
They’re professionals. They put the good of their clients and patient above themselves, unbiased in giving the best services and advices.
Each of us has our own dealings with them. But for most of us, we leave to ourselves the dealings with the most intimate and important aspect in our lives–FINANCE.
If professionals are taking care of our homes, our bodies, health, and lives, whose taking care of our finances? A financial planner takes care of that. He’s the professional that “provides sound, coordinated financial advice to individuals and their families”.
Money matters-wise, the financial planner is your bet. He has studied and trained in personal finance, giving unbiased advice and professional service to clients.
Being unbiased, he rigorously seeks solutions and products in the market that would best achieve the client’s financial objective—without preference or loyalty to any financial institution.
As a professional, he upholds and seeks the client’s needs and interests first and continuous to educate himself, improving his competence in personal finance.
Everyone can study personal finance but not everyone is a certified or registered financial planner who is part of a body of professionals giving studies, training and expertise in the field.
Being certified means the financial planner has undergone the sufficient training, has the necessary knowledge, and upholds the practice’s code of ethics.
There are many professional organizations in the world today that issues certifications. In the Philippines, the Registered Financial Planners Institute pioneers the practice of professional financial planning with the RFP certification program.
In choosing a financial planner, make sure that he’s certified by the organizations mentioned.
Being the professional totally dedicated to your financial well-being, he gives you advice on the following specific areas: Cash Flow Management, Investment Planning, Insurance Planning, Tax and Estate Planning, Education Planning and Retirement Planning.
In Cash Flow management, the financial planner gives advices on income and expense management as well as debt management. The objective is to manage expenses to generate surpluses for reallocation to other investments, allocations or insurance coverage.
In Investment planning, the financial planner optimizes the allocation of the client’s investible funds to reach investment objectives and returns, selecting the best investment vehicles and instruments, and reviewing and reallocating periodically should the need arises.
Insurance Planning, on the other hand, is done to make the client and his family sufficiently protected should there be unforeseen events such as disability or death.
Tax and Estate Planning is done by financial planners for clients who want to maximize their estate to be passed on to their beneficiaries.
In Education Planning, the financial planner maps out investment allocation to answer for future education funding of the client’s children or dependents.
Lastly, Retirement Planning is done to secure the desired retirement lifestyle of the client.
But is there really need for a financial planner? Can’t each person be responsible for his or her own finances?
Yes, each person is responsible for his or her own finances. But there’s a need for knowledgeable advice on how to be financially responsible.
In the case of investments, a lot of people want to grow their hard-earned money thru investments. But it’s sad that many of them don’t understand the basics on investing.
Moreover, they don’t know where, how and when to invest. Worse, they get tricked by get-rich-quick schemes of shadowy entities and persons.
The lack of knowledge results to serious financial loss which the investor may not recover anymore.
Think of the Tibayan Group of Companies back in early 2000. I have a friend whose family invested in this and lost at least P300,000 just because they didn’t go through the full process of prudent fund investment.
And there’s the UITF (unit investment trust fund) scare a few years back. A lot of investors withdrew their funds when the NAVs (net asset value) went down. Many had losses and jumped into the bandwagon as they were played by fear.
If they were given good and sound financial advice, the investors could have stayed their course and even engaged more in buying when prices were down so they could to stack up and increase their holdings.
Those who held onto their funds and increased their holdings had positive returns, beating time deposit rates by at least four times.
Meanwhile, a dedicated financial planner is updated with the latest economic trends and knowledge to steer your finances and investments even during rough times.
He would put your mind at ease. If something bad happens, you can leave for your family a safe and secure future through the advice of a professional financial planner.
He would also help you craft, plan and realize your dream retirement lifestyle. You don’t have to worry about your finances at all because there’s a financial planner to take care of it.
Too oftentimes, people go to the doctor in the midst of illness just to find out it’s too late or it could have been averted. A dedicated financial planner won’t this to your finances.
Do you have one?
Rienzie P. Biolena is a Registered Financial Planner of RFP Philippines. He’s president and chief financial planner of WealthArki and Consultancy, a financial planning firm. Learn more about personal financial planning at the 71st RFP program in September 2018. To inquire, e-mail firstname.lastname@example.org or text <name><e-mail><RFP> to 0917-9689774.
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