After a plan is developed, what next?
The best plan is useless unless it is put into action. The financial planner will assist you completely in implementing the plan, if and when, desired by you will make changes. Implementation and review of the plans are also very important part of financial planners' responsibility.
How does a good financial planner select investments for a client?
The financial planners will do a proper analysis of the instrument before recommending a client. He will see the past performance and also the fundamental prospects of the investment class. Before a good financial planner recommends any investment, he considers the appropriate investment linked funds or mutual funds to meet your objectives. He considers the current economic conditions, the outlook for that asset class or type of security and how this investment fits within your portfolio given your objectives and tolerance for risk.
How often should I update the plan?
It is good to review the plan when there is a lifestyle change such as marriage, birth, death or divorce. Any change in financial position should be evaluated as well. Most people have an half yearly update of their plans that reviews how the plan is being implemented. The review also considers changing goals and circumstances.
Can I be my own financial planner?
If you have the required skills and knowledge and time, you can surely do it. But all three are very important for making and monitoring a financial plan. There are few personal finance software packages, magazines or self-help books can help you do your own financial planning but still as we can't have doctors' software, we can't have financial planning software too. It has to be very comprehensive and customized.
I earn well and have accumulated a substantial amount. I think am well off. I don't need financial planning. What do you say?
It is good to hear that. But it is very important for you to protect your wealth from growing inflation as well. You cannot let your hard earned money fade away. Also to ensure that your lifestyle and future goals are well met in time, financial planning is important.
