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Financial Planning Resolutions: Read the Changes and Walk a Step Forward

Jae young Yang - CFP KoreaBy Jaeyoung Yang, CFP 

What kind of plans and resolutions should a financial planner have for the New Year? A financial planner suggests financial plans to clients and assists them in their implementations, providing continued monitoring. Therefore, he or she ought to continue to develop new plans for clients’ financial planning to incorporate them in his or her portfolio. In a new year, governments revise laws and regulations, some of which concern financial planning. A financial planner must conduct monitoring in accordance to the revised laws and regulations. The revisions are announced months before they are made effective. A financial planner must be ready to adapt their clients’ financial plans and/or keep themselves familiar with new contents to monitor.

Financial Reform and Regulation

With new laws, regulations, and policies in a new year, a financial planner comes up with new plans and makes new resolutions to implement them. The New Year’s resolutions can have different focuses each year.

Some laws and regulations that are under review for a revision can have an adverse impact on the income of financial planners. They could entail a reduction of financial planners’ fees in a trade of financial products. Some reforms could prevent insurance planners who are employees of an insurance company or a GA from providing an advice service in an individual capacity. The result is that the financial planners’ income could be reduced. The significant impacts of the new laws and regulations on financial planners would require them to be familiar with their contents and be prepared.

2012 Financial Resolutions

Financial planners can have such resolutions for the New Year as follows:

  1. First, in accordance with revised laws and regulations, they should monitor clients’ financial plans and develop new ones.
  2. Second, they should invest in education for self-development. They would need education to familiarize themselves with new revisions in the laws and regulations concerning financial planning practice and adapt them into new financial plans. They also should pay attention to natural science, engineering, and humanities that could be deemed irrelevant to financial planning at a first glance. They should do this because they can provide a better financial planning service when they understand clients’ circumstances better, as financial planning deals with the clients’ life objectives. I also recommend that they enroll in a graduate school to acquire more advanced or wider intelligence and knowledge.
  3. Third, financial planners should build their trust, responsibility and professionalism in their relationships with clients and go to any length to protect the interests of financial consumers. They must instill the belief in the clients, financial consumers, and the government that they put the clients before themselves when they conduct the professional practice of counseling, recommending a product, and suggesting a financial plan. New laws and regulations are emerging that might have a negative effect on the financial planners working in an individual capacity. The rationale for clients is that there is a lack of a system to prevent a conflict of interest when financial planners working in an individual capacity recommend a financial product. This means it is difficult for planners to assure objective advice is being given that protects a client’s interest. Also, there is no current system that to hold planners responsible for compensating the client’s losses. Therefore, financial planners must help clients (consumers) recognize that they are making an unswerving effort to provide a financial planning practice that puts the interest of clients first.

The year of 2012 will require financial planners to do more thinking, develop more plans, and make more resolutions. Considering the transformations of global economic environments, the revisions of laws and regulations concerning financial planning, and the changes in the clients’ circumstances, financial planners should develop a higher quality of financial plans. They also ought to help clients BELIEVE, by leaving no stones unturned and building a trust relationship with continuous monitoring.

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