The primary purpose of the report is to denote the services provided by a financial planner, the financial planning process, key stakeholders, their roles, important skills and qualities of a successful financial planner. Further, the business cycle and its impact on labor market will be denoted by outlining relevant legal as well as regulatory requirements abide by a financial planner.
Financial planning is one of the most essential components which can allow in deeper understanding of future financial plan of an individual. Without understanding the financial condition in future, an individual will not be able to address the key aspects of their expenses and income sources in future. The future financial objectives of an individual can be achieved with the help of sound financial planning (Alexander 2018). Further, financial planning can allow an individual to get a comprehensive picture of their current sources of finance, their expenses as well as debts and other elements of their financial life.
Financial advisors can provide various types of services as per the need of financial planning associated with the project. This includes risk management, educational planning, legal planning, retirement planning, cash flow analysis, debt management, portfolio management, estate planning, as well as small business planning. Depending on the service, financial planners can take charges and time.
Further, financial planner can also assist an individual to understand how they can meet their financial goals as well as can also aid them to understand investment, insurance as well as other tax matters. Further, a financial planner can assist a business to understand financial health of the business and it can also allow in comprehending risks associated with the business (Linnainmaa, Melzer and Previtero 2021). Financial planner can also allow in creating a financial plan related to business and financials allowing understanding net forecasted expenses and incomes of an individual. Further, financial planner can also provide advice related to the tax planning, retirement account related rollovers as well as can also allow in cash flow planning and management.
Financial planning is an ongoing process which allows in understanding of the financial situation and allows in understanding how changes in different socioeconomic factors can affect the decision making significantly. The first step of financial planning process consists of identifying the financial situation and determining financial objectives related to the business. After understanding the financial goals of the business, the next step is to understanding alternatives for investments and evaluation of alternatives with relation to the existing proposed financials. Further, the financial planner will also need to denote the financial concerns and risks related to the proposition to the party. Afterwards, the financial planner conducts the risk evaluation process, they will be able to understand the areas of risks and their severity (Bogan, Geczy and Grable 2020). Further, they can understand the number of risks and will be able to take financial situations based on the number of risks associated with the business. In the next step, the risks and all the recommendations should be put together to create a financial plan and implement the same within the financial planning process. Finally, the financial planner should always re review and business planning process and monitor the plan to understand how it can improve the financial plan for an individual.
There are various key stakeholders involved within the financial planning process who have stake towards the success of the business. The key stakeholders include, customers, shareholders, regulatory agencies, auditors and financial planners.
The customers ask for products and services from a business. In this instance, the customers can ask for financial planning from the financial planner of a business. Further, the shareholders of the business make various decisions related to the business. The regulatory agencies set up various laws and regulatory requirements that a business must need to understand in order to make the business adhere to the current regulatory requirements. Further, the auditor needs to conduct regular audit in order to understand whether the business is following the financial and regulatory requirements related to the business or not. This will allow in understanding whether the business is adhering to the ethical and social ground.
Since financial planners deals with various clients, they have to understand the client concerns towards their financials. Therefore, having good communication skills and professionalism should one of the most important skills of a financial planner. Further, the planner should always tell the core requirements and concerns related to the financials of a client so that thy can mindfully understand the financial situation of the client. Further, financial planners ought to have business development skills which is one of the most essential skills that will allow them to create performance objectives related to the financials of the client and track sales figures of a business (Lusardi 2019). Further, a financial planner must also pose critical thinking skills that will allow them to adjust according to the circumstances and will allow them to adjust to changes as per financials of it’s the client. Further, financial planners will have to practice the critical thinking which will allow in understanding the client’s current financial situation
Further, the interpersonal communication is also an essential skill that a planner should have which will allow them to work with the clients as well as will allow them to acquire necessary information related to the financial planning of the business. Further, it is also essential for a financial planner to possess empathy which will allow them to create proper connections with their clients thereby improving their current state of mind.
In the current economic environment, in order to understand the labor market efficiently, understanding of business cycle can allow in deeper understanding of current labor markets significantly. The frequency of business cycle and informality of labor market can significantly affect the labor market of a developing economy.
Business cycles can effortlessly operate in natural changes, but that doesn’t imply they can’t be changed. Utilizing monetary and fiscal policy, nations may and do strive to regulate the various stages, delaying or accelerating them along. The government is in charge of fiscal policy, while the central bank is in charge of monetary policy (Webber 2022). Whenever an economic situation is contracting, specifically during a recession, governments utilize expansionary fiscal policy, which entails raising project spending or lowering taxes. These actions enhance the amount of disposable income available to consumers, which supports economic growth. Expansionary fiscal policy boosts aggregate demand by increasing government spending or lowering taxes, therefore boosting the labor market. expansionary policy is most suitable, whenever an economy is weak and produces less than its potential Output.
As per the code established under Corporation Amendment Act 2017, financial planners must abide with various professional requirements in order to improve their financial planning of the business. To be a financial planner, the planner must have proper qualifications and should also comply with the Financial Planners and Advisers Code of Ethics 2019 which has set out different principles as well as values in the area of client care and professional commitment. The compliance with FSG, PDS, FASEA and SOA must be adhered to in order to make the financial planning process successful and as per professional requirements.
The compliance with FSG obligation can allow clients to provide sufficient amount of information’s that will allow them in deciding whether they want any financial advices or not. Without understanding the Financial Service Disclosure (FSG), clients will not be able to ensure that they are getting proper amount of financial advice.
As per the Product Disclosure Statement (PDS), a client must receive various types of disclosure related guidelines before the issuance of the financial product. Without adherence of these disclosures, financial planning services cannot be provided to the client. It has been also denoted in PDS that the disclosure should be always complete and should promote deeper understanding of the current financials of client.
Every financial planner should abide by the FASEA obligation which requires them to act with integrity while they are assisting their clients. Further, the FASAE code aims to improve behavioral standard and professionalism of financial planners towards the clients.
The client can be provided with SOA (Statement of Advice) which cannot allow them in understanding their current financial disclosures and it can ensure that the client are getting proper amount of financial information which can allow them to take proper financial decisions.
Conclusion
On a concluding note, it can be noted that financial planning is an essential component of a business which allows financial planners to make financial estimation about their client’s financial situation. Further, the report has evaluated the importance of business cycle in labor market and has also denoted the skills and qualities of a financial planner. The legal and regulatory requirements related to financial planning has been also discussed in the report.
References
Alexander, J., 2018. Financial planning & analysis and performance management. John Wiley & Sons.
Bogan, V.L., Geczy, C.C. and Grable, J.E., 2020. Financial planning: A research agenda for the next decade. Financial Planning Review, 3(2), p.e1094.
Linnainmaa, J.T., Melzer, B.T. and Previtero, A., 2021. The misguided beliefs of financial advisors. The Journal of Finance, 76(2), pp.587-621.
Lusardi, A., 2019. Financial literacy and the need for financial education: evidence and implications. Swiss Journal of Economics and Statistics, 155(1), pp.1-8.
Webber, D.A., 2022. Labor market competition and employment adjustment over the business cycle. Journal of Human Resources, 57(S), pp.S87-S110.
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