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Financial Counselling

A very commonly used definition of Financial Planning is "Financial Planning is the process of meeting one's life goals through the proper management of personal finances."

It's best to understand the above definition by breaking it up into three parts;

Financial Planning is a Process:

Worldwide professional financial advisors follow a standard six-step process to deliver Financial Planning services consisting of:

  1. Establishing and defining client relationship
  2. Gathering client data, including goals
  3. Analyzing and evaluating current situation and needs
  4. Developing and presenting recommendations
  5. Implementing the recommendations
  6. Monitoring and reviewing the Financial Plan

Meeting one's Life Goals:

Individuals and families have many goals in life to fulfil for which they will have to save, accumulate and grow their money. The most common life goals are:

  1. Children's future including education and marriage
  2. Buying a house
  3. Comfortable Retirement

Other goals may include going on regular or one time vacations, purchasing a car/vehicle, corpus for starting own business and being debt-free (home loan, car loan), etc.

Management of Personal Finances:

Financial Planning is all about managing finances of an individual or a family. It should not be mistaken for corporate finance although many of the concepts used in corporate finance are used in Financial Planning.

While offering solutions to clients, the following aspects of personal finance should be analysed as a whole rather than seeing them in isolation:

  1. Income
  2. Expenses
  3. Assets
  4. Liabilities
  5. Insurance
  6. Taxation
  7. Estate

For more details, Contact Wisdom Wealth Consultancy.