(Note: The above diagram provides a broader view of Financial Planning requirements. It is indicative of a typical working individual and timing and duration of the stages could vary depending on the exact financial status and needs of different individuals and families)
Financial Planning needs vary for different individuals and is very much related to the life- stage where they are at present. During the ages , 18 to 25 and 25 to 35, it is more in the nature of meeting basic requirements, paying loans installments and meeting other financial obligations such as setting-up of a household, purchase of a house etc. During the age of 35 to 60, there is potential for substantial accumulation of wealth and in the post retirement years there is very little earning and most of the money accumulated is put to use for sustenance and distribution of wealth.
What is Financial Planning?
Financial Planning is a process of realizing your life's dreams by means of a systematic approach to your finances. It involves identifying and mitigating your financial risk, setting realistic goals, prioritizing them, and evolving matching asset allocation and Investment strategies to help you achieve these goals. It is a proactive approach to personal finance.
The Financial Planner will assess your current situation, income and expenses, future cash flows and evolve a plan which will help you realize your goals and your dreams. Financial Planner will also assist you in taking corrective action, if necessary, with your existing investments, and also where there are mismatches between your desired goals, your income and expense pattern etc. The recommended Financial Plan and Investment Portfolio will be periodically reviewed with the client for further action