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Newsletter

2008 2nd Edition (Other Editions)

QUESTIONS ABOUT FINANCIAL PLANNING

WHAT IS PERSONAL FINANCIAL PLANNING ?

Expert guidance by professionals for the improved coordination of financial decision making to satisfy life and estate needs. Direction of portfolio (asset/liability) decisions. Fulfillment of portfolio needs through specific product and vendor choices.

WHY DO I NEED PERSONAL FINANCIAL PLANNING ?

To organize your finances in the most efficient manner to reduce taxes, maximize investment return, provide adequate risk management, save time and attain financial peace of mind.

BUT CAN'T I ACCOMPLISH THAT MYSELF ?

Perhaps, but will you? Most business people and professionals are finding it increasingly difficult to plan adequately for their personal financial growth and security. Among the most common reasons for their frustrations are:

• Lack of time
• The wide variety of today's investment opportunities
• The complexity of ever-changing tax laws
• The entwining of employee compensation and benefits

WHAT IS TYPICALLY INCLUDED IN A COMPREHENSIVE PLAN ?

A plan may range from 50 to 150 pages, based on the complexity of circumstances and the degree of explanation and detail:

• Cash Flow Budgeting Analysis
• Capital Management (debt and investment portfolios)
• Estate Planning and Liquidity Analysis
• Income Tax Projections and Planning
• Retirement (forecasting benefits, costs and options)
• Insurance Needs (life, property, casualty and disability)
• Educational Funding Requirements
• Closely-held Business AnalysisEmployee Benefit Analysis (coordinate personal holdings)

WHAT IS MY ROLE IN THE PLANNING PROCESS ?

You and your spouse provide information about your personal and family goals, attitudes about taxes, indebtedness, investment risk and security. Your financial plan will take this information into consideration. You will also be called upon to update this data at least once each year.

WHAT CREDENTIALS DO I LOOK FOR IN A FINANCIAL PLANNER ?

Planners can have experience in many fields, including accounting, law, banking, life and health insurance, casualty insurance, finance, business management, taxes and investments.

Professional designations include:

• CFP^CM (CERTIFIED FINANCIAL PLANNERCM)
• ChFC (Chartered Financial Consultant)
• CPA (Certified Public Accountant)
• CLU (Chartered Life Underwriter)
• RFC (Registered Financial Consultant)

HOW CAN I MEASURE THE WORTH OF FINANCIAL PLANNING ?

After your situation has been analyzed and recommendations made, you will be able to compare clearly your present financial condition with what is projected for the future. The long-range benefits should far outweigh the costs.

WHAT DO PERSONAL FINANCIAL PLANS COST ?

Planners usually charge between HK$5,000 to HK$50,000 for their advice, but fees can be as high as HK$100,000 depending on the complexity of the plan. Planners generally charge a fee in order to provide an objective analysis. Yet, clients will still pay commissions when they buy stocks, bonds, insurance policies and annuities.

Since there are commissions associated with the sale of nearly all financial or insurance products, the financial planner may also receive additional compensation in the form of commission on the sale of these specific products.

Some planners still rely solely on income generated from the commissions when clients buy stocks and bonds, and use the plans as a way of generating sales. A small group of planners charge fees only and handle no products at all.

WILL PERSONAL FINANCIAL PLANNING MAKE ME RICH ?

• Increasing the productivity of assets
• IProviding capital growth and security for your family
• IBroadening asset structure to reduce risks
• IProviding participation in new investment opportunities
• IIncreasing disposable income through tax savings
• ISelecting investment alternatives more carefully
• IMinimizing shrinkage of accumulated assets at time of:
• Disability
• Forced Retirement
• Death