Financial planning should cover all areas of the client's financial needs and should result in the achievement of each of the client's goals as required. The scope of planning would usually include the following:
Investment and planning issues: planning, creating and managing capital accumulation to generate future capital and cash flows for reinvestment and spending, including managing for risk-adjusted returns and to deal with inflation
Retirement planning: planning to ensure financial independence at retirement including 401Ks, IRAs etc.
Tax planning: planning for the reduction of tax liabilities and the freeing-up of cash flows for other purposes
Estate planning: planning for the creation, accumulation, conservation and distribution of assets
Cash flow and liability management: maintaining and enhancing personal cash flows through debt and lifestyle management
Implementing the financial planning recommendations
Monitoring the financial plan and the financial planning relationship
Licensing, regulations and self-regulation
In many countries, there are no requirements regarding use of the title of 'financial planner'.
Australia
In Australia, a company providing financial services must obtain a licence from the Australian Securities and Investments Commission. However, there are no requirements for the individuals providing the financial advice, and the ASIC website states that "Holding an AFS licence does not provide a guarantee of the probity or quality of the licensee's services."
Canada
In Canada, "financial planners" are unregulated in every province except Quebec, where only individuals holding the Planificateur Financier designation are allowed to use the title “Financial Planner”. The provincially-sanctioned Institut québécois de planification financière administers that designation. Outside of Quebec, there are currently no restrictions, no educational prerequisites, and no licensing requirements for individuals calling themselves financial planners, or for businesses using “financial planning” in their name or services offered. As of July 2020, Ontario and Saskatchewan have introduced legislation to regulate financial planning titles, but the legislation has yet to be enacted. Many financial advisors in Canada call themselves financial planners yet only hold licences to sell personal financial products, or use non-expiring qualifications with no monitoring or public accountability process. There are only two publicly monitored and fully regulated financial planning designations outside of Quebec - the CFP and the R.F.P. designations. The R.F.P. is the older and more stringent of the two publicly monitored designations. All R.F.P.s must first demonstrate their competency, then abide by a code of ethics and adhere to rigorous practice standards as defined by the granting body, the Institute of Advanced Financial Planners. Every R.F.P. must attest each year that financial planning is their primary vocation.
India
Malaysia
The Securities Commission Malaysia introduced legislation through amendments made to the Securities Industry Act in 2003 to regulate financial planning and the use of the title or related-title of 'financial planner' or to conduct activities related to financial planning. In 2005, amendments to the Malaysian Insurance Act require those who carry out financial advisory business and/or use the title of financial adviser under their firm to obtain a license from Bank Negara Malaysia. Some persons who offer financial advisory services, e.g., licensed life insurance agents, are exempted from licensing as a practising requirement.
In Singapore, financial services are highly regulated by The Monetary Authority of Singapore, the regulator and supervisor of financial institutions in Singapore. Rules are set by MAS for financial institutions and are implemented through legislation, regulations, directions and notices. Currently, the majority of the financial planners are commission-based, which may cause a conflict of interest related to the products recommended. In 2015, Balanced scorecard framework was implemented to better align the interests of the FA industry and consumers. This ensure FA representatives and supervisors meet key performance indicators that are not related to sales, such as providing suitable product recommendations and making proper disclosure of material information to customers. Failure to achieve good grades for these non-sales KPI will directly affect their commission.
