Six Steps that should be followed by a Professional Adviser in the Financial Planning Process
1: Establishing and defining a professional relationship
2: Gathering data, including goals
3: Developing and presenting financial planning recommendations and/or alternatives
4: Analysing and evaluating your financial status
5: Implementing the financial planning recommendations
6: Monitoring the financial planning recommendations
Best Financial Advice assures you of the following
- Areas analysed include life, disability and dread disease insurance, retirement savings, investments, medical aid, wills and estate
- A full Financial Needs Analysis is conducted with each client, using the client's figures and information
- Products that will be provided are only offered to address a need that is discovered in the analysis
- At no time will you be sold anything
A full analysis looks at six different areas, as applicable to you. Death, Disability, Dread Disease, Retirement, Education, Investment. I provide you with the information on each area, you provide me with your own facts and figures, and together we complete the analysis, utilising a computerised process that calculates the cover you may obtain in a best case scenario to address any shortfalls the analysis picks up. This is purely for the purpose of understanding what your own needs and requirements are, and giving you options to address these needs. Should you desire to address any of these areas of concern, YOU decide the order of Priority, andI will provide the appropriate recommendations. A Financial Needs Analysis should be conducted annually.
Do you Own a Business? Are you in a Business Partnership? Do you know whatthe implications are of not having your Business Interests correctly assessed? Are you using your Personal Insurance policies to cover your Business Liabilities? Are your Legal Agreements in place? If you are not sure of the answer to any of these questions, or if you have answered No to any of these questions, a Business Needs Analysis should be conducted to review these areas of concern. In terms of Legal Agreements, in the event of the death of a partner or business owner there should be Business Assurance policies in place to provide the financial requirements to carry out the instructions contained in the agreements. It is not wise to use your personal insurance to cover your business - the law will prevail and the possibility and probability of your spouse and dependants coming second best is very high. Always ensure that your business needs are addressed separately to your personal needs.
Short term savings vehicles such as an Endowment or a Unit Trust provide a good platform on which to invest, for goals like Education, Holidays and Cushion Accounts. Long term savings vehicles such as a Retirement Annuity provide the platform to save for when you decide to stop working, while providing you with a tax benefit during the lifetime of the investment.
Short Term Insurance
It is always a wise decision to review your vehicle andhousehold insurance regularly. Do your premiums continue to rise every year? Do your vehicle values decrease every year? Have you purchased more items for your home? All of these should be regularly reassessed to ensure that you have accurate and comprehensive cover, and that you are paying the right premium for the right cover. Through my Business Alliance partner, review your short term insurance and find out whether you can obtain more value for your money - I did!
Benefits in this category provide protection for your Biggest Asset - your Ability to Earn an Income. In the event that you are unable to work due to injury or illness, Disability Cover provides an income to replace what you have lost, either as a Monthly Benefit or as a Lump Sum Benefit, or both. (A monthly Benefit also qualifies for tax deductibility.) In the event of your death, Life Cover replaces your income for loved ones who are left behind. In the event that you contract a SevereIllness, Dread Disease Cover provides a Lump Sum that will assist in covering lost income while you are recovering, as well as available cash to settle any medical bills that may not be covered by a Medical Aid or a Hospital Plan.
This refers to a company fund for employees, where you as an employer or business owner may decide to provide a retirement benefit to your employees as part of their salary structure. Risk benefits such as Life Cover, Funeral Plan,Disability and Dread Disease cover may be added, with the benefit of a group risk assessment. There are tax benefits to the employer, good long term savings benefits to the employees, and a fund of this nature can provide a good incentive for employees to remain loyal to a company.
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There are a variety of different options available, but to put things simply - Medical Aid refers to a Comprehensive Medical Plan that covers you in hospital, out of hospital, and for day to day expenses like doctor's visits and medication. This is usually a high end product, designed for families. A Hospital Plan refers to a Medical Plan that covers you in hospital, but not necessarily out of hospital. You may also choose a plan that covers certain events out of hospital, and certain day to day expenses, usually funded from a Medical Savings Facility. The options are many - the easiest way to decide is to look at all the available choices, and select what gives you the cover you are looking for in your current circumstances. Options can be changed as and when necessary.
It is also possible to institute a Medical Aid for your business or company for all employees.
Do you have a valid and up to date Will? It is important to understand the implications of not having a will - the consequences of dying intestate (with no will) or with an old outdated will can be disastrous for those left behind, both emotionally and financially. Even more importantly, if you have children, what will happen to them? Will they be looked after by someone they know and trust? Will the funds you provide for them be protected and controlled? It is not wise to assume that everything will just be alright - the law does not agree. Rather put a simple will into place than have nothing at all.
Simply put, this refers to the process of ensuring that any liabilities you may have would be covered in the event of your death, and any dependants you need to provide for will have sufficient funds for their needs and requirements. It is important to note that there are tax implications that apply upon death, and Estate Planning looks at covering any tax liabilities that may apply while still providing for your dependants. Be aware that a Life Cover Benefit is designed for this purpose, not to enrichyour dependants but to ensure that they are provided for at the level you require. Should your estate be substantial in the event of your death, you may also provide options in your Will to reduce your estate duty liability (tax), such as leaving assets to your spouse. Remember though that this only transfers the tax liability from your estate to your spouse's estate, and as such may require Life Cover on your spouse's life to deal with this estate duty.