Financial Planning for Everyone


You probably have heard of the saying ‘If you fail to plan, you plan to fail’. The question is, do you need to engage a professional to help you plan your finances? Or should you wait until you have acquired at least US$1 million of investable assets excluding primary residence, which makes you a high net worth individual (HNWI)? Yes to the first question and no to the second, according to Bryan Zeng, CFP, a Senior Manager in Wealth Management & Operations with FA Advisory Sdn. Bhd. “I couldn’t think of any situation where financial planning services would not benefit a person who earns an income or deals with money, regardless of their age or how much they are worth,” said Zeng.

“For a middle income earner with savings, proper planning can put the savings into good use to achieve the financial objectives of that person. For someone without savings, a comprehensive analysis can be done to identify the reason for no savings, and then a plan can be developed to create or increase savings and improve the financial well­being of the individual. And if the individual is debt-­ridden, a debt management plan can be drawn up to give a strategic step by step blue print to reduce and eventually eliminate the burden of the debts,” Zeng explained. “Of course, the examples above only focuses on the cash management part of financial planning.”

Zeng defines financial planning as managing and optimising one’s current (financial) resources to achieve the desired (financial) goals. It is a roadmap that steers you towards your goals and deals with a much broader spectrum, namely, the accumulation, protection and preservation, and distribution of assets.

Ten Important Questions

Once you’ve decided to engage a financial planner, you need to ask a few crucial questions to determine if they are the right fit for you. The most important question is asking if they are licensed as a Capital Markets Services Representation Licence (CMSRL) holder by the Securities Commission. It’s not sufficient to be certified by FPAM as the Capital Markets and Services Act 2007 mandates that only CMSRL holders can practise financial planning.

What can you expect from your financial adviser?

arrow-382675_1920“A lot!” exclaimed Zeng.

For a start, he said, financial advisers have a fiduciary duty to act in the client’s best interest. Any conflict of interest must be eliminated or minimised and highlighted. Financial Advisers need to have integrity, professionalism, competency, as well as carry out their work diligently in an objective and transparent manner. “Basically you should need to be at the level where you can trust your adviser with your life. Stay far, far away from advisers who are only interested in your money,” Zeng cautioned.

Brayman commented that financial planning has come a long way indeed. “When financial planning started over 40 years ago, it was perceived as a cross-sell opportunity. People from any related industry thought that they could sell insurance, funds and a plethora of things, and being a financial adviser gives them an excuse to be in front of those clients and batch it all up,” he said. “Thankfully, more and more financial planners have risen above that and are putting the clients’ best interest first.”

Fees and Charges

Financial Planning services can be fee-based or commission-based on financial products implemented, said Zeng. Professional financial planners should fully disclose the remuneration or compensation they receive for services rendered, including any kickback and non-monetary benefits, as well as explain the scope of work in detail. This is to ensure that the client is able to make an informed decision and give assurance that the client’s interest comes first.

So, what should an investor allocate for this service? “This largely depends on the complexity and quality of the advice. Each individual’s circumstances is different.  Most cases that are simple and straightforward would only cost 1 to 2% of a person’s wealth. Very often they are much lower,” said Zeng.

The Sooner the Better

When should one get started? The earlier the better, according to experts, as there are opportunity costs involved when financial decisions to save and invest are delayed.

Although saving is an important aspect when it comes to financial planning, a professional financial planner will also look at all aspects of your life, including financial management, asset management, tax planning, retirement planning and estate planning. This is an important benefit of engaging a licensed certified financial planner.

“The fact is that people desperately need advice when it comes to financial planning and personal finance. But they have been going to friends, family, and even strangers for financial advice, only to end up being victimised. With the wealth of information available online, people are becoming smarter, and they are now realising that professional advice from independent financial advisers (IFAs) are more reliable and customised for them compared to the alternative,” opined Kevin K.M. Neoh, a Licensed Financial Planner with VKA Wealth Planners.


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