Who is a Financial Planner?


Financial Planning is a process that sets up your financial goals and prioritises them according to your preferences.

There are six steps in financial planning:-
1. Establishing the relationship between the client and the financial planner.
2. Collecting and gathering client’s data and information.
3. Analysing client’s financial status.
4. Recommending appropriate financial plans to achieve client’s financial goals.
5. Implementing the financial plans.
6. Monitoring and reviewing the financial plans.

A Financial Planner is a person who assists or helps the client to set up their financial goals. They will write up the financial plan for the client that shows their present financial status and implement some strategies in order to achieve those goals.

In Malaysia, a financial planner must be licensed by Securities Commission and is also a Financial Adviser Representative approved by Bank Negara Malaysia. He or she must have qualifications such as CFP (globally recognised) or RFP. They should also be attached to a financial planning firm who is licensed with a Securities Commission for financial planning.

A good licensed financial planner should have work experience in a financial industry such as unit trust, insurance, estate planning, taxation, and banking, and is also experienced in writing financial plans for clients. However, there are some licensed financial planners (LFP) who are attached to a financial planning firm with the intention of only recommending financial products to clients without a plan.

A licensed financial planner’s remuneration/fees comes from writing financial plan, receiving product commission upon client taking up certain financial products such as life insurance or unit trust, will writing and etc.

My advice to investors is to engage and pay fees to a licensed financial planner (LFP) as they can provide you with a comprehensive financial plan tailor-made just for you rather than focusing on product solutions only to fulfill your financial needs. The reason is simple; you need an independent and experienced financial planner to guide you in your personal finances towards your goals in life. You may also want to implement the financial solutions suggested by your LFP as the recommendation is based on your needs.

What else can a financial plan do for you?
1. Analyse your financial situation first.
2. Help achieve your financial goals with strategic use of your limited financial resources on your hand.
3. Act as your financial road map throughout the journey of your life avoiding costly financial mistakes.

Financial mistakes are costly, which ironically, the amount lost could have been used to engage an LFP who will save you money and help it to grow instead. Examples of financial mistakes:

1. Buying the wrong insurance policy and ending up letting it lapse within the next three years.
2. Taking up investment products that are not suited to your risk profile.

Therefore, engage an experienced licensed financial planner to plan your financial journey holistically.