Page 247 - DMGT515_PERSONAL_FINANCIAL_PLANNING

Personal Financial Planning

Notes applied to asset classes. This allocation is probably the most important decision and may account
for more than 80 % of the return on the portfolio. Allocate, Diversify and Rebalance. An asset
allocation plan will guide how you spread investments among broad asset categories to balance
risk and reward in your portfolio. There’s no single plan that’s right for everyone. To create the
best plan for you, you’ll need to consider: the time frame for investment; your investment
objective and your risk appetite. Hence, though equities are giving stellar returns at present,
some exposure to debt is still necessary.

13.3 Implementing the Personal Financial Plan

The next step is to implement the plan. The implementation process requires an action plan,
which lays out the specific actions to be taken, by whom, and when. The FPSB Rules of Professional
Conduct specifies:

Rule 708

A financial planning practitioner shall make and/or implement only recommendations that are
suitable for the person and all agreed recommendations must be implemented in an accurate,
efficient and timely manner.
Irrespective of whether the person agrees to proceed with the plan or chooses not to accept the
advice, there are also internal administrative procedures that need to be followed. This section
explores these aspects!

Action Plan

The written financial plan should, where appropriate, include an action plan which may, for
example, be presented as follows:
The following steps need to be auctioned in order to implement your financial plan:
1. You need to sign the enclosed Letter of Engagement and Authority to Proceed that set out
the basis of your request to engage the concerned person as your financial planners and
request that them attend to the matters specified.

2. Sushmita to sign the withdrawal request to withdraw the friendly chit fund with subsequent
deposit to your joint bank account.
3. Sushmita to sign the applications for investment into the equity mutual fund investments
as per the recommendations.
4. Draw cheques for the recommended investments. .
5. Arrange an appointment to meet with ABC Insurance to increase your home and contents
insurance. We would be happy to assist with arranging this appointment as required.
6. Meet with our insurance planning specialist/XYZ Risk Insurance to arrange an application
to increase Sumit’s life insurance by ` 2,300,000 and to arrange applications for income
protection insurance for you both.
7. Arrange an appointment with your solicitor to write your wills and to discuss the issue of
powers of attorney.
8. Draw a cheque for payment of our professional fees.

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