1. 1 Careers in the Investments Industry II: Financial Planning Private Wealth Management Winter 2012 Personal Finance: Another Perspective

2. 2 Potential Jobs in the Investments Industry I. Investment Banking Investment banking, Asset Management, Sales and Trading, Research II. Financial Planning/Private Wealth Management Investment advising, Insurance, and Estate planning III. Corporate Finance Pension Fund Administration and Management IV. Financial Consulting Pension Fund Consulting

3. 3 II. Financial Planning Objectives A. Understand the purpose of Financial Planning B. Understand the structure of a Financial Planning firm C. Know how financial planners are paid D. Know where the potential jobs are in Financial Planning E. Know how to prepare for a career in Financial Planning

4. 4 A. Purpose of Financial Planning What is the purpose of financial planning? To help the client determine how they can meet their personal goals through the proper management of their financial resources Why be a financial planner instead of a stockbroker or accountant? Financial planners take the “big picture” view of a persons financial situation and make recommendations based on the clients needs in such areas as: Budgeting, Savings, Taxes, Investments, Insurance, and Retirement and Estate Planning

5. 5 Purpose of Financial Planning (continued) What does Financial Planning entail? The responsibility of the financial planner is to: 1. Establish and define the client-planner relationship 2. Gather client data, including goals 3. Analyze and evaluate the client financial status 4. Develop and present financial planning recommendations and/or alternatives 5. Implement the financial planning recommendations 6. Monitor the financial planning recommendations and re-evaluate as necessary

6. 6 B.Structure of a Financial Planning Firm What is the structure of a financial planning firm? While there are many different types, major divisions might include: Budgeting and Debt Reduction Advice and analysis on proper budgeting and savings and debt reduction strategies and help Investments and Research Advice and analysis on financial assets, asset allocation, and security selection

7. 7 Structure of a FP Firm (continued) Insurance Advice and analysis on using insurance products to achieve your financial goals Retirement and Estate Planning Advice and analysis on retirement and estate planning to help individuals achieve their goals and minimize taxes Financial planning is a process, not a product. While it can be performed in conjunction with providing financial products, it can also be a distinct and separate part of the practice

8. 8 C. How are Financial Planners Paid? Financial planners are generally compensated in four different ways: 1. Fee based. Some charge a specific fee for their services on a per-hour or per-project basis 2. Assets under management. Some charge a percentage of the value of the client's assets under management 3. Commissions. Some receive commissions from investment or insurance companies for products sold 4. A combination of fees and commissions, and even a salary if they work for a financial company. Financial Planners must disclose their method and source of income to their clients

9. 9 D. Jobs in Financial Planning Where are the jobs in Financial Planning? Most financial planning professional either work for themselves or take positions with: · Banks · Financial planning organizations · Life insurance companies · Accounting or law firms · Stockbrokerage and securities brokers · Mutual Fund managers · Credit counseling organizations · Large companies to look after employee benefits

10. 10 E.What does it take to be a Successful Financial Planner What are the key skills for a financial planner? People skills FPs have good counseling skills and are driven by a genuine desire to help other people. Analytical skills FPs take a 'big picture' approach to their clients' lives. The ability to synthesize information clearly is a key skill. Generally candidates with a background in the following areas stand a better chance at being successful: Counseling, Accountancy, Law, Insurance,· Investments, and Finance

11. 11 The Financial Planner (continued) What are the skills gained as a Financial Planner? A solid understanding of the key areas of personal finance Key knowledge of debt and debt reduction strategies Knowledge of how the Capital Markets work A good understanding of companies and industry composition and structure Professional presentation analysis Some financial modeling and quantitative work

12. 12 The Financial Planner (continued) What are the major challenges of financial planners? Most Financial Planners are paid on a transaction basis, rather than a salary This makes smoothing income important Personal contacts and meeting with the public are critical to success in this business You must be willing to hear people say no, and not take it personally These factors make this industry difficult 80% of those who start this industry leave before two years

13. 13 E.How to Prepare for a Career in Financial Planning How do you prepare for a career in this field? Understand the industry, positions, and lifestyle This is an industry for self-starters—are you suited? Start building your contacts—meet with speakers Get to know Financial Planners in the areas Do well in your classes—work hard and smart Use your time efficiently Look to beginning your CFP (or CFA) program It is looked on highly in the industry Have a good Personal Financial Plan Show potential employers as an example of your best work

14. 14 A Career in Financial Planning How do you spiritually prepare for a career? Don’t get discouraged Understand yourself and your goals Keep your priorities in order Obedience is the first law of Heaven--do what you should Follow the Spirit He is your competitive advantage--stay worthy of His help Remember the Lord’s hand in your blessings Always be appreciative of his blessings Remember to share them with others

15. 15 Review of Objectives Do you: A. Understand the purpose of Financial Planning? B. Understand the structure of a Financial Planning firm? C. Know how financial planners are paid? D. Know where the potential jobs are in Financial Planning? E. Know how to prepare for a career in Financial Planning?