A Training Report

A TRAINING REPORT
ON
FINANCIAL PLANNING THROUGH INSURANCE

IDBI FREDRAL CO.LTD.
Submitted to:
Satyug Darshan Institute of Engineering and Technology
By:
Anmol Chopra
Roll No.-
Batch 2015 – 2018
In Partial Fulfilment of
Bachelor of Business Administration
(Industry-Integrated)
(Specialization: Financial Services and Banking)
MAHARSHI DAYANAND UNIVERSITY

ROHTAK (HARYANA)
( APRIL, 2018)
Satyug Darshan Institute of Engineering and Technology

Bhupani Lalpur Road, Village Bhupani
Faridabad - 121002, NCR, Haryana, India
DECLARATION
I, Anmol Chopra hereby declare that this training report titled “Financial
Planning through Insurance IDBI Federal Insurance Co.LTD” is the record of
authentic work carried out by me during the period from 8 th January 2018 to 10th
April 2018 and has not been submitted to any other University or Institute for
the award of any degree / diploma etc.
(Signature)
Anmol Chopra
Date:
BONAFIDE CERTIFICATE
This is to certify that Anmol Chopra of Satyug Darshan Institute of

Engineering and Technology has successfully completed the project work
titled “Financial Planning through Insurance IDBI Federal Insurance
Co.LTD” in partial fulfilment of requirement for the completion of Bachelor in
Business Administration (BBA-IIFSB) course as prescribed by the Maharshi
Dayanand University, Rohtak, (HARYANA).
This project report is the record of authentic work carried out by him/her during
the period from 8th January 2018to 10th April 2018. He has worked under my
guidance.
(Signature)
Mrs. Sapna Taneja
Assistant Professor, BBA Department
Project Guide (Internal)
Date:
Counter signed by
(Signature)
Mr. Ravi Bakshi
Department Coordinator (BBA Department)
Date:
TABLE OF CONTENT
S.NO PARTICULARS PAGE

NO.
1
Introduction to the study

2
Company Profile
3
Research Methodology
4
Data Analysis & Interpretation

5
Findings, Conclusion and Suggestions

6
Bibliography
7
Annexure
CHAPTER 1
INTERODUCTION
TO THE STUDY
Every risk involves the loss of one or other kind. In older time, the contribution by the person was
made at the time of loss. Today, only one business, which offers all walks of life, is insurance
business. Owing to growing complexity of life, trade and commerce, individual and business firms
and turning to insurance to manage various risks. Every individual in this world is subject to
unforeseen uncertainties which may make him and his family vulnerable. At this place, only
insurance helps him not only to survive but also recover his loss and continue his life in a normal
manner.
Insurance is an important aid to commerce and industry. Every business enterprise involves
large number of risks and uncertainties. It may involve risk to premises, plant and machinery,
raw material and other things. Goods may be damaged or may be destroyed due to fire or
flood. Some risk can be avoided by timely precautions and some are unavoidable and are
beyond the control of a business. These unavoidable risks can be protected by insurance.
INSURANCE CONCEPT
The insurance industry has both economic and social purpose and relevance. It provides
social security and promotes individual welfare. Generally the insurance companies are big
investors in long gestation infrastructure development projects. Insurance reduces risk and
helps to raise productivity in the economy. Insurance is a device for the transfer of risks of
individual entities to an insurer who agrees for a consideration (called premium) to assume to
a specified extent losses suffered by the insured. Insurance covers insurable risks and the
probability of insurable risk can be determined or forecasted for example risk related to life,
property, riots, thefts are insurable. The insurance companies are also financial intermediaries
as they collect and invest large amount of premiums in government projects. They offer
protection to the investors, provide means for accumulating savings and channelize funds to
the government and other sectors.
What is Insurance
In D.S. Hamsell words, insurance is defined “as a social device providing financial
compensation for the effects of misfortune, the payment being made from the accumulated
contributions of all parties participating in the scheme”
In simple terms “Insurance is a co-operative device to spread the loss caused by a particular
risk over a number of persons, who are exposed to it and who agree to insure themselves
against the risk”. Thus, the insurance is
(a) A cooperative device to spread the risk;

(b) the system to spread the risk over a number of persons who are insured against the risk;
(c) the principle to share the loss of the each member of the society on the basis of probability
of loss to their risk; and
(d) the method to provide security against losses to the insured
Insurance may be defined as form of contract between two parties (namely insurer and
insured or assured) whereby one party (insurer) undertakes in exchange for a fixed amount of
money (premium) to pay the other party (Insured), a fixed amount of money on the
happening of certain event (death or attaining a certain age in case of life) or to pay the
amount of actual loss when it takes place through the risk insured (in case of property)
Type of Insurance
Insurance cover various types of risks and include various insurance policies which provide
protection against various losses.
There are two different views regarding classification if insurance:-
I. Business point of view
The insurance can be classified into three categories from business point of view
1. Life insurance 2. General Insurance and 3. Social

Insurance.
1. Life Insurance: The life insurance contract provide elements of protection and
investment after getting insurance, the policyholder feels a sense of protection because he
shall be paid a definite sum at the death or maturity. Since a definite sum must be paid, the
element of investment is also present. In other words, life insurance provides against pre-
mature death and a fixed sum at the maturity of policy. At present, life insurance enjoys
maximum scope because each and every person requires the insurance.
Life insurance is a contract under which one person, in consideration of a premium paid
either in lump sum or by monthly, quarterly, half yearly or yearly installments, undertakes to
pay to the person (for whose benefits the insurance is made), a certain sum of money either
on the death of the insured person or on the expiry of a specified period of time.
Life insurance offers various polices according to the requirement of the persons like Term
Assurance, Whole Life, Endowment Assurance, Family Income Policy, Life Annuity Joint
Life Assurance, Pension Plans, Unit Linked Plans, Policy for maintenance of handicapped
dependent and Endowment Policies with Health Insurance benefits
2. General Insurance: The general insurance includes property insurance, liability

insurance and other form of insurance. Property insurance includes fire and marine insurance.
Property of the individual and business involves various risks like fire, theft etc. This need
insurance Liability insurance includes motor, theft, fidelity and machine insurance.
Type of General Insurance policies available are Health Insurance, Medi-Claim

Policy, Personal Accident Policy, Group Insurance Policy, Automobile Insurance, Worker’s
Compensation Insurance, Liability Insurance, Aviation Insurance, Business Insurance, Fire
Insurance Policy and Travel Insurance Policy
3. Social Insurance: Social insurance provide protection to the weaker sections of the
society who are unable to pay the premium. It includes pension plans, disability benefits,
unemployment benefits, sickness insurance and industrial insurance.
II Risk Points of View
The insurance can be classified into three categories from Risk point of view
1. Property Insurance 2. Liability Insurance 3. Other forms of

Insurance
1. Property Insurance: Property of the individual and business is exposed to risk of

fire, theft marine peril etc. This needs insurance. This is insured with the help of:-
(i) Fire Insurance: Fire insurance covers risks of fire. It is contract of indemnity. Fire
insurance is a contract under which the insurer agrees to indemnify the insured, in return for
payment of the premium in lump sum or by instalments, losses suffered by the him due to
destruction of or damage to the insured property, caused by fire during an agreed period of
time. It includes losses directly caused through fire or ignition.
There are various types of fire insurance policies are Consequential loss policy,
Comprehensive policy, Valued policy, Valuable policy, Floating policy and Average policy
(ii) Marine Insurance: Marine insurance is an arrangement by which the insurer undertakes
to compensate the owner of the ship or cargo for complete or partial loss at sea. So it provides
protection against loss because of marine perils. The marine perils are collisions with rock,
ship attack by enemies, fire etc. Marine insurance insures ship, cargo and freight.
The following kinds of marine policies are Voyage policy, Time policy, Valued policy, Hull
Policy, Cargo Policy and Freight Policy
(iii) Miscellaneous Insurance: It includes various forms of insurance including property

insurance, liability insurance, personal injuries are also insured. The property, goods,
machine, furniture, automobile, valuable goods etc. can be insured against the damage or
destruction due to accident or disappearance due to theft.
Miscellaneous insurance covers Motor, Disability, Engineering and aviation risks, Credit
insurance, Construction risks, Money Insurance, Burglary and theft insurance and All risks
insurance
2. Liability Insurance: The insurer is liable top pay the damage of the property or to
compensate the loss of personal injury or death. It includes fidelity insurance, automobile
insurance and machine insurance.
The following are types of liability Insurance are Third party insurance, Employees
insurance and Reinsurance
3. Other forms of Insurance: It include export credit insurance, state employee

insurance etc. whereby the insurer guarantees to pay certain amount at the happening of
certain events.
The following are other form of Insurance are Fidelity Insurance, Credit Insurance and
Privilege Insurance.
CHAPTER 2
COMPANY PROFILE
COMPANY PROFILE
IDBI FEDERAL
IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, India’s
premier development and commercial bank, Federal Bank, one of India’s
leading private sector banks and Ageas, a multinational insurance giant based
out of Europe. In this venture, IDBI Bank owns 48% equity while Federal Bank
and Ageas own 26% equity each. IDBI BANK: IDBI was formed in 1956. They
provided funding for major corporate, SEBI, NSE etc. Later on they merged with
IDBI BANK in 1992. This is the only Government owned bank of our country,
where the Government of India holds 61% stake in the company. The bank has
zero account balance even for non-corporate entities. This bank was formed, to
support India’s Industrial Financial sector. FEDERAL BANK: This is also
known as “God’s own bank”, as their major operations are in Kerala. This is
India’s first bank to have core banking service. They have a huge NRI base.
Nearly 50% revenue of IDBI FEDERAL is from FEDERAL BANK.
AGEAS: They have expertise in the know-how about Insurance business. They
focused only on LIFE INSURANCE business.
IDBI FORTIS: The merger between the three companies, started off as IDBI
FORTIS, in association with FEDERAL BANK. FORTIS was initially a bank,
who later ventured into insurance and mutual fund business. This had an
international presence. Later on, BNP Paribas took over FORTIS and thus,
FORTIS became AGEAS. This gave birth to IDBI FEDERAL LIFE
INSURANCE CO. LTD.
IDBI FEDERAL LIFE INSURANCE CO. LTD.: At IDBI Federal, they

endeavour to deliver products that provide value and convenience to the
customer. Through a continuous process of innovation in product and service
delivery they intend to deliver world-class wealth management, protection and
retirement solutions to Indian customers. Having started in 2007-2008, in just
five months of inception they became one of the fastest growing new insurance
companies to garner Rs 100 Cr in premiums. They chalked up the highest “first
year” sales figures by any Insurance company. The company offers its services
through a vast nationwide network across the branches of IDBI Bank and
Federal Bank in addition to a sizeable network of advisors and partners. As on
January 31st 2014, the company has issued over 3 lakh policies with over Rs.
15, 230 Cr in Sum Assured. There are many channels through which they sell.
These include Agencies, Alliances, Bankers, Brokers, and so on.
History
 2006: IDBI Bank, Federal Bank and Belgian-Dutch insurance major Fortis
Insurance International
 NV signed a MoU to start a life insurance company
 2008: IDBI Fortis Life Insurance Co. Ltd., which started its operations in March
2008
 2008: IDBI Fortis opens its second branch in Andhra Pradesh in Vijayawada
 2008: IDBI Fortis Life positive on assured return products
 2008: IDBI Fortis launches the Bondsurance Plan
 2009: IDBI Fortis announces Rs 250cr capital infusion
 2009: Nimbus ropes in IDBI Fortis as title sponsor of India–Sri Lanka series
 2009: 'IDBI Fortis' Boss-Ka-Boss receives PRCI Award
 2009: IDBI Fortis launches Retiresurance Pension Plan
 2009: IDBI Fortis scores with Goalsurance
 2009: IDBI Fortis reaches the banks of Hoogly
 2009: IDBI Fortis launches Incomesurance Immediate Annuity.

 2009: IDBI Fortis Life Insurance uses an interactive application to help users easily
calculate their taxes
 2009: IDBI Fortis reaches the City of Eastern Light
 2009: IDBI Fortis receives bronze Dragon at 'PMAA 2009'
 2009: IDBI Fortis Life Insurance introduces financial inclusion plan in rural
Orissa
 2009: IDBI Fortis launches Termsurance Protection Plan
 2013: IDBI Fortis redefines endowment & money back with Incomesurance
 2014: IDBI Fortis to open 65 more branches; raise headcount by 1,000
 2016: IDBI Fortis now renamed as IDBI Federal Life Insurance Company
Schemes Offered by IDBI Federal Life Insurance:
1. Childsurance:
IDBI federal’s childsurance is for the parents who are looking to make their
child’s future shock-proof is its powerful insurance benefits. Childsurance allows
to you to protect your child plan with triple insurance benefits so that your wealth-
building plan remains unaffected by unforeseen events and your child future
remains secure.
2. Healthsurance:
IDBI federal Healthsurance Hospitalization and surgical plan offers host of

features and benefits that is designed to help the customers to manage extra
burden that comes with hospitalization.
3. Lifesurance:
IDBI feral Lifesurance Plan is a saving insurance plan that helps you to
safeguard your wealth at the same time will present better opportunity to earning
better return.
4. Bondsurance:
Bondsurance is designed for customer looking for guaranteed returns which
will not get affected by financial market conditions. It offers guaranteed return on
investment along with life insurance cover.
5. Wealthsurance:
Wealthsurance plan enables the policyholder to save and build wealth to meet
their financial goals. Wealthsurance plan comes up with a wide range of 13
investment option and 7 insurance benefits with low charge structure and
unmatched flexibility.
6. Homesurance:
Homesurance protection plan provides full insurance cover for properties

under construction, thus ensuring that beneficiary gets the full sanctioned amount
in case of an unfortunate event. It also has an innovative fixed cover for those
who would prepay their loans early.
7. Incomesurance:
Knowing customer helped us to combine the Endowment & Money Back

plans into a single plan. It linked the returns to the G-sec rates, transparently
declared by the government. Also, the Guaranteed Annual Payout and other
benefits upon death are tax- free under Sec 10(10D).
8. Termsurance:
Teramsurance protection plan of IDBI federal offers unique increasing cover
option that can automatically increase the cover every year without increasing the
premium.
CHAPTER 3
REVIEW OF
LITERATURE
REVIEW OF LITERATURE
The rapid growth of capital markets in India has opened up new investment avenues
for investors. Keeping this in mind the Financial Institutions provide number of
services to its customer with a wide spectrum of investment opportunities. In order
to retain their customers they provide them with special services besides traditional
services.
The invention of new technology and services by financial institutions has given the
consumers a wide range of investment avenues to invest in. One of the special
services brought out by them is “FINANCIAL PLANNING SERVICES” which
aims at identifying a person’s financial goals, evaluating existing resource and
designing the financial strategies that help the person to achieve those goals and
enables him to earn maximum returns at minimum level of risk.
The stock markets have become attractive investment options for the common man.
But the need is to be able to effectively and efficiently manage investments in order
to keep maximum returns with minimum risk.
Financial Planning helps you to give direction and meaning to your client’s financial
decisions. It allows him to understand how each financial decision affects other
areas of finance. For example, buying a particular investment product may help your
client to pay of his mortgage faster or may delay his retirement significantly. By
viewing each financial decision as a part of a whole, you may help your client
consider the long term and the short term effects on his life goals. You will help
them feel more secure and more adaptable to life changes, once they can measure
that they are moving closer to the realization of their goals.
In near future a proper financial planning is required to invest money in all type of
financial product because there is good potential in market to invest.
The main objective of this project on FINANCIAL PLANNING is to review the

real meaning of Financial Planning, its objectives, role, framework, responsibilities
of Financial planner and the study of various other issues related to Investment
planning, Tax planning, Asset allocation and Retirement planning.
I am inclined to this topic, as it has given me actual knowledge of this service along
with its working and how the financial planner plans and manages the portfolio.
Moreover, it has guided me to understand this so called complex world of
investment and financial planning and also increase my knowledge to such extent. I
hope it will prove beneficial to me in developing my further career.
This project was undertaken to know what exactly is the Financial Planning,
How it is carried out ,Who carries it out, Why it is carried out, When it is carried out
,and the most important What is the benefit of carrying it out. Below my question
were answered.
Basically Financial Planning is the process of meeting life goals through the proper
management of your finances. There is a need for financial planning because the
financial situation in the country has changed in the last few years, this has changed
in such a manner that it will be difficult for one to maintain a decent standard of
living with the current means this requires financial planning and in addition there
are also several individual specific factor that has to be fulfilled. Financial planning
provides direction and meaning to one’s financial decisions. The process involves
gathering relevant financial information, setting life goals, examining customer
current financial status and then coming up with a plan for customer on how he can
meet with his goals.
The process that is followed by the IDBI Federal is the planner first discuss the
general recommendations with the client informally, this allows the clients to
indicate their preferences and opinions on the options that have been designed. Once
the planner and the client agree on the recommendations, a concise written proposal
is prepared along these lines:
An overview of the clients short and long term goals.
The client’s current financial strengths and weaknesses and implications of

financial plan.
The client’s financial objectives anchored to current resources.
A detailed summation of all recommendations.

The financial plan for mutually selected recommendations.
A comprehensive economic overview of the client’s financial plan, supported by

financial statements.
A step-by-step implementation and monitoring plan.
Definition:-
Financial Planning is the process of identifying a person’s financial goals,
evaluating existing
resources and designing the financial strategies that help the person to achieve
those goals.
Process of Financial Planning:-

Financial planning is a highly personalized service. It is not a product. It is a cyclical
service that constantly repeats as client needs change over time. Preparation and
implementation of the financial plan is a long-term relationship and not a one-off
exercise.
For the success of the financial planning exercise, it is essential that the prospective
client should have complete confidence in the financial planner’s capabilities.
Confidence is built when the planner can demonstrate adequate knowledge,
technical depth and complete dependability. Also remember that financial planning
is a two-way interaction between the client and the planner. It is not and should not
be treated as a one-way prescription which is to be given by the planner to the client.
Both the planner and the client have certain responsibilities to make the exercise a
success.
The Planning Process:-

The preparation of the financial plan is a multi-dimensional process. It requires the
planner to collect as much information as possible about the current resources, assets
and liabilities of the client. The planner needs to analyze the collected information
from a number of different aspects to develop an optimal financial plan. To prepare
and implement a comprehensive and effective financial plan, the Financial Planning
Standards Board recommends the following 6-step process:-
Let us look at the above steps in more detail.

1. Establish the Client-Planner Relationship
Before approaching a client, it is important for the financial planner to clearly
understand his
own role. The role of the financial planner is not to suggest get-rich-quick schemes.
Rather, it is
to evaluate and study the clients' needs, gather and analyze data and prepare a
financial plan
for now and for the future. Preparation and implementation of the financial plan is a
long-term
relationship and not a one-off exercise.
A financial planner has to prepare a plan that helps his clients:-

 Organize their finances
 Improve their cash flows
 Lower their personal income taxes
 Plan for their retirement
 Improve their investment performance
 Lower their investment risk
 Insure themselves appropriately and reduce insurance costs
 Minimize their estate settlement costs
To achieve this, the planner needs to answer the following questions:

 What is the most immediate concern of the client?
 What is the client’s current financial situation?
 What are the client’s immediate and long-term needs?
 What is the gap between the client’s needs and the current financial situation?
 What services can you apply to the client’s needs?
 How would the client benefit from your service portfolio?
 What is the estimated time frame to complete the plan and accomplish goals?
Client agreements and confidentiality clauses
When a client utilizes the services of a financial planner, he/she shares financial and
other personal information with the planner that is normally not shared with anyone
else. The client-planner relationship presupposes a very high level of trust between the
two parties. Consequently, the planner is under obligation to maintain utmost
confidentiality of this information. To prevent unnecessary litigation and disputes in the
future, it is recommended that the financial planner should enter into a client agreement
which formalizes the relationship with the client and establishes the basis on which the
service would be provided. Such an agreement is also referred to as the 'Letter of
Engagement.'
2. Gather client’s data and determine goals and expectations

The next step involves researching and collecting information that will help the financial
planner
design and implement a successful financial plan. There are two aspects to this
exercise:-
(a) Understanding the client's current financial position.
(b) Getting to know the client's financial goals, objectives and requirements.
The first helps the financial planner understand where the client is at the moment and
the second
helps, the financial planner understands where the client wishes to go.
Formulation of Goals
Financial goals are the milestones that the client hopes to reach with the help of his
financial
resources.
These milestones could be concerning different aspects of life like:-
Saving for marriage / childbirth
Buying a new car / house / electronic equipment
Creating a corpus for retirement
Creating a corpus for children's education
Adequately insuring self and family

Creating cash reserves for emergency usage etc.
The financial planner should ensure that the goals are:
 Specific;
 Realistic;
Measurable / Quantifiable in money terms; and
To be achieved within a specific time period

Once the client has stated clear, quantifiable goals for financial planning, the next step is
to rank those goals in order of importance. This is necessary because most clients do not
have the resources to fulfil all their goals. The financial planner must make it clear to the
client that less important goals must be sacrificed or postponed to achieve the more
important ones. This done, the financial planner needs to work out the amount of money
available for achieving these goals. To achieve most financial goals, the client would
need to start saving and investing appropriately. Therefore it is important for the
financial planner to know where the money to invest will be coming from.
3. Analyze client’s objectives, needs and current financial situation Preparation of the
Client's Personal Financial Statements Preparation of the Cash flow Statement and the
Budget Prioritizing Goals The next step is to prioritize the financial goals of the client
and work out the amounts that are required to be invested towards achieving these goals.
Evaluate Qualitative Factors

Qualitative factors have a significant bearing on the financial plan for a client. The
client's
tolerance towards risk, investment preferences, current health status etc. need to be kept
in mind while evaluating alternative Strategies.
4. Develop appropriate strategies and present the financial plan

A financial planner needs to develop appropriate strategies for the client in the following
areas:
 Cash flow management
 Insurance planning
 Investment planning
Cash Flow Management
Cash flow management is the means for funding client’s goals in other planning areas,
therefore;
generally it is the starting point of the planning process. Once the cash flow
management plan is in place, the inflows have to be channelled in one of the three areas
- expenses, reserves for emergencies and capital accumulation.
Once your clients have planned to maximize income and minimize spending, they need
the planner's help to plan for their insurance, investment, education, income tax,
retirement, and their estate.
The Benefits of Financial Planning

Financial Planning helps you give direction and meaning to your client’s financial
decisions. It allows him to understand how each financial decision affects other areas of
finance. For example, buying a particular investment product may help your client to pay
off his mortgage faster or may delay his retirement significantly. By viewing each
financial decision as a part of a whole, you may help your client consider the long term
and the short term effects on his life goals. You will help them feel more secure.
Assessing your current wealth
Net worth: - Your assets are the things that you own. You probably own assets that
have many different forms, including cash, investments, personal property, real
estate etc.
Definition:-
Your net worth is the difference between the totals of your assets and liabilities. In
other words, if you sold all your assets for the values stated and paid off all your
debts, the amount left over would be your net worth. The net worth of a person is
a measure of a person’s financial position as of the date of the personal balance
sheet.
CHAPTER 3
RESEARCH
METHODOLOGY
DEFINITION:
Research refers to „a search for knowledge‟. It can be defined as a scientific and
systematic search for pertinent information on a specific topic.
Research comprises defining and redefining problems, formulating hypothesis or

suggested solutions; collecting, organizing and evaluating data; making deduction
and reaching conclusions; and at last carefully testing the conclusions to determine
whether they fit the formulating hypothesis – Clifford Wood.
RESEARCH METHODOLOGY
It is a way to systematically solve the research problem. It may be understood as

science of studying how research is done scientifically. In it we study the various
steps that are generally adopted by the researcher in studying his research problem
along with the logic behind them. In general methodology is an optional framework
within which the facts are placed so that the meaning may be seen more clearly. The
sources of data shown that designing of a research plan calls for decision on the data
sources are research approaches (primary and secondary data) research instruments
(observation survey experiment) sampling plan and contact methods (personal
interviews).
RESEARCH DESIGN
A research design is the determination and statement of the general research
approach or strategy adopted for the particular project. It is the heart of the planning.
If the design adheres to the research objectives, it will ensure that the client need
will be served.
Research design is a plan structured and strategies of investigation. It is the

arrangement of condition and analysis of data in a manner to combine relevance to
the research purpose with economy in procedure.
 In order to achieve the objective it was necessary to talk to the customers and
public to draws the conclusions regarding the objective.
 For visiting the customers and publics to collect the relevant information; a
questionnaire has to be designed. The questionnaire was designed in such a manner
to achieve the objective of the research.
 The sample size taken is 50 customers and publics.
TYPE OF RESEARCH
In this project Descriptive Research has been used.
Descriptive Research:
This is kind of research structure which is concerned with describing the
characteristics of the problem. In this way the main purpose of such a research
design is to present a descriptive picture about the marketing problem on the basis of
actual facts. For this it is important to obtain the complete and actual information
about the subjects.
Research Objective:
The Financial Planning is vast in nature. It is intended to provide a bird’s-eye view
of the client’s assets. The Financial planner has to have bottomless knowledge of
markets, funds etc.
Considering this fact, the scope of the study is defined to satisfy following
objectives:
Understand the necessity of financial planning,
Study and apply the financial planning process,
Identify various investment alternatives that can fit in client’s profile, and
Provide the client in an appropriate asset allocation mix based on certain factors
like time horizon, risk tolerance etc.
This project consist of Quantitative as well as Qualitative data as data collect for
preparing plan is both the types
Gathering Data
There are two types of data to gather from the client
- Quantitative
- Qualitative.
Quantitative Data
Quantitative data provides specific information concerning a client along with
numerical details
Concerning his/her financial status. It also provides the basis for the many financial
analyses that the
financial Planner needs to perform.
Examples of quantitative data include the following:
 General family profile
 Names, addresses, and phone numbers of family members
 Assets and liabilities
 Cash inflows and outflows
 Insurance policy information
 Employee benefit and pension plan information
 Tax returns for the last three years
 Details on current investments
 Retirement benefits available
 Client-owned business information
Qualitative Data
Qualitative information provides general information concerning a client's goals,
lifestyle, health status, risk tolerance level, employment status, hobbies, attitudes,
and fears. Knowing a client's specific goals, such as planning to move when retiring
at age fifty-five, funding a child's college education and expenses, starting an
expensive hobby just before retirement, or travelling extensively during retirement,
is important to the success of any financial plan.
Examples of qualitative data include the following:

 Goals and objectives
 Health status of client and family members
 Interests and hobbies
 Expectations about employment
 Risk tolerance level
 Anticipated changes in current/future lifestyle.
 Other planning assumptions.
Data Sources:
SECONDARY DATA:
The secondary data includes information obtained from various sources which
includes, Books, Business Newspapers, Websites, etc
LIMITATIONS OF THE STUDY
1. The project work is mainly based on the above mentioned sources of information.
2. Limitation of client in investing in particular kind of asset based on his age.
3. Time limitation
OBJECTIVE OF THE STUDY
To take an overview of the client’s in short and long term goals.
To have the client’s current financial strengths and weaknesses and implications
of financial plan.
To study the client’s financial objectives anchored to current resources.
To give a detailed summation of all recommendations.
To suggest appropriate financial plan for mutually selected recommendations.
To also give comprehensive economic overview of the client’s financial plan,
supported by financial statements.
SCOPE OF THE STUDY
Personal Financial Planners are not just for wealthy people. Every individual can
benefit from objective help to create, grow, accumulate and utilize wealth to fulfil
one’s personal goals, family goals and other lifestyle objectives systematically
without any anxiety. Financial planners can guide individuals to achieve their
ultimate aim of spending retired life peacefully without compromising living
standards. A Qualified financial planner will provide advice on.
Systematic Savings
Cash Flow Management
Debt Management
Assets Allocation for Investment
Managing Risk through Insurance Planning
Tax Strategies to increase investible surplus
Distribute residual wealth through estate planning
Financial Planning is a profession for people with good communication skills
combined with knowledge of how financial service industry works. As a Financial
Planner one could work for a bank, insurance company, a brokerage house or have
own practice. Most important is to understand that the suitability of products you are
guiding people to purchase is based on their Risk Appetite, Age and Time Frame of
Goals and Objectives. Financial Planners need to update themselves constantly on
new products, services and tax laws that might be good for their clients. This is a
field that requires a life time of continuing education. A Trusted Financial Planner
can play an important role in people’s lives helping them to achieve dreams such as
owning a home, seeing their children’s education and enjoy an active retirement.
CHAPTER 4
DATA ANLAYSIS
&
INTERPRETATION
Create and maintain an adequate emergency fund

You must ensure that you are adequately prepared for unexpected events in the short-term by
creating an emergency fund equal to three to six months of living expenses. This will enable you
to pay for costs that are not covered by insurance, as well as any kind of urgent expenses.
You have Rs. 1.21 lakhs in your savings account. You are advised to maintain Rs. 50,000
(approximately one month of your expenses) as an emergency fund. Though one must keep at
least 3-6 months of living and committed expenses in emergency fund. However, you have an
immediate goal of house purchase in the year 2016.
You are advised to build and maintain an emergency fund gradually (after you have acquired the
immediate goal – home purchase) to an equivalent amount of Rs. 1.50 Lakhs over time.
Your Emergency Fund
Category Amount in
Total 1,21,00
Amount transferred from savings account to 71,00
investment
Savings account amount allocated to 50,00
emergency fund
Investment Planning
Current Asset Allocation
Asset allocation is the cornerstone of good investing. Each investment included in your portfolio
must be of an overall asset allocation strategy and this plan must be genetic (one-size-fits-all), but
rather must tailored to your specific needs. Based on the information that have provided, the
current asset allocation if your portfolio is:
Proposed Asset Allocation

Asset allocation is the cornerstone of good investing. Each investment included in your portfolio
must be part of an overall asset allocation strategy and this plan must be genetic (one-size-fits-
all),but rather must tailored to your specific needs. Based on the information that have provided,
the current asset allocation if your portfolio is:
Protection Planning
The purpose of the protection planning section is to examine existing insurance coverage and
make recommendations. The goal is to determine whether there is adequate coverage and/or if
any additional coverage that may be needed.
Life Insurance
Observation
Currently you are covered by different life insurance policies worth sum assured of Rs. 8 laky by
LIC, Max Life and ING Vyasa. You pay an annual premium of Rs. 26,647 per annum. (See life
insurance details, Annexure 1).
Life insurance need analysis requires that we look at what would happen in the event of your
death. This analysis is done using information you provided to us about your income,
expenditure, assets and insurance coverage.
We have computed the insurance coverage requirement for you based on a scenario that all
household expenses that will need to be incurred by your family and all other financial goals and
liabilities are fully met in the event of your death.
As per our analysis you are under-insured by Rs. 1 crore. (See life insurance need analysis,
Annexure 2)
Recommendation
You are advised to buy an additional term life policy worth Rs. 1 crore. The annual estimated
premium is expected to be Rs.26, 192 for a term of 20 years. (Source: HDFC Term Life Insurance
Policy).
Health Insurance
Observation
Currently, you are not covered for health by any private health plan.
You must have adequate health insurance coverage especially because of rapidly rising health
care costs. In addition to the employer provided plan, it is strongly advisable to keep a private
health plan. This is especially useful if you change jobs. Also, health insurers do not accept pre-
existing diseases.
Recommendation
You must consider buying a family floater scheme worth sum assured Rs. 3 Lakh. This will cover
you, your spouse and your child. The estimated annual premium is Rs. 3,575. (Source: Reliance
Health Silver Plan)
Planning for Goal
Observation
You are planning to buy a new house of approximately Rs. 30 Lakh in the year 2014.
Analysis
Based on your current situation, you can meet the above mentioned goal to the extent as
mentioned below:
Amount in Rs. (in today's value)
Recommendation:
Funding available towards your home purchase goal
1. Down payment of 15% of the value of home through the Investment Portfolio
2. Bank loan for funding the balance of Rs. 25.50 Lakh.
1. Down payment of Rs. 4.50 Lakh through the Investment Portfolio as follows:
Savings account – Rs. 71,000 must be utilized

Mutual funds – Rs. 2.07 Lakh
Surplus of year 2008 – Rs. 1.71 Lakh
2. Bank loan for funding the balance Rs. 25.50 Lakh.

Description Year Annual Estimated EMI in Rs.
Annual Income 2009-2023 3.04 Lakh
Note: Please note that our analysis shows that in the year 2009, the annual income surplus is not
expected to support the EMI in the year 2009 by Rs. 96,000. However, as you will get tax
benefits under section 24(b) for the interest portion paid towards home loan, you will be able to
meet the EMI expense by the Money saved on taxes.
Goal: Khushi’s Education

Observation
You need to plan for the following education expenses of Khushi's in today's value.
1. School education of Rs. 30,000 per annum starting in the year 2009 till the year 2021. This is
expected to grow at 10% per annum.
2. College education expenses of Rs. 40,000 per annum (in today's value) between 2022 and
2025.
3. Professional education expense of Rs. 10 Lakh in today's value in the year 2026.
Analysis
mentioned below:
Amount in Rs. (in future value)
Recommendation
You should consider utilizing the following sources of cash to help you fund your goal as per our
analysis.
1. Regular annual income surplus to fund the school education – We have treated the school and
college expense as a regular expense and deducted this from your cash flow every year. Your
annual income surplus during the years 2009-2025 is expected to support the education expenses
as mentioned above.
2. Investment from the Annual surplus in the recommended portfolio to fund college and
professional education expenses
Description Year Amount to be invested (Rs.)

Investment from 2011-2025 1.48 Lakh annual surplus
Note: The Investment is expected to be made in the recommended asset allocation which is
expected to generate 10.80% per annum
Observation
You need to plan for the following education expenses of Khushi's in today's value.
1. School education of Rs. 30,000 per annum starting in the year 2013 till the year 2025. This is
expected to grow at 10% per annum.
2. College education expenses of Rs. 40,000 per annum (in today's value) between 2026 and
2029.
3. Professional education expense of Rs. 10 lakh in today's value in the year 2030.
Analysis
mentioned below:
Year Goal Amount Goal Amount

(Desired) (Achievable)
Recommendation
analysis.
1. Regular annual income surplus to fund the school education – We have treated the school and
college expense as a regular expense and deducted this from your cash flow every year. Your
annual income surplus during the years 2013-2025 is expected to support the education expenses
as mentioned above.
2. Investment from the Annual surplus in the recommended portfolio to fund college and
professional education expenses
Description Year Amount to be invested (Rs.)

Investment from 2010 88,782 annual surplus 2011 43,939
2012 1.24 lakh
2013 1.06 lakh
2014-2027 1.58 lakh
Observation
Khushi's is expected to get married in 2028. You need to plan for the following expenses in
today's value.
1. Marriage expenses of Rs. 4 lakh (today's value) in the year 2028.
Analysis
mentioned below:
Recommendation
analysis.
1. Regular annual surplus
Observation
You need to plan for following expenses in today's value:
1. Domestic - You wish to spend Rs. 20,000 on vacation every 2 year.
Analysis
Recommendation
In our analysis, we have taken the above expense as an annual regular expense and your cash
flow is supporting this expense from your annual income surpluses from 2009-2047.
Observation
The probable year for your expected 2nd child to get married is 2032. You need to plan for the
following expenses in today's value.
1. Marriage expenses of Rs. 4 Lakh (today's value) in the year 2032.
Analysis
mentioned below:
analysis.
1 Regular annual surplus
Observation
You intend to retire at age 50. After retirement you need to plan for the following expenses in
today's value.
1. Annual household expenses of Rs. 3.60 Lakh in today's value between 2027(your
retirement year) and 2056 (life expectancy).
Analysis
Based on your current and projected financial situation you cannot meet the above mentioned
goals due to retirement at age 50.
Note: You are contributing every month Rs. 3,500 towards to Provident Fund and Rs. 1,400 per
month towards Gratuity. In our analysis, expected growth rate of PF and Gratuity is 8% per
annum. Also there is a contribution from your employer of Rs. 3,500 per month towards your
Provident Fund account.
Recommendation
You should consider utilizing the following sources of cash to fund your retirement goal as per
our analysis:
1. Retiral assets
2. Insurance maturity proceeds
3. Annual income surplus to be invested in recommended asset allocation
1. Retiral assets
2.Insurance maturity proceeds
3. Annual income surplus to be invested in recommended asset allocation to fund the balance of
retirement goal:
Note: All the above surpluses have been allocated towards your retirement goal, this is done after
funding the other goals such as Khushi's marriage, education, etc.
Financial Glossary:
Net Worth: Assets less Liabilities.
Cash Flow: Income less Expenses.

Monthly Budget: A way of tracking your monthly income and expenses.
Contingency Reserve Fund: Fund to meet any unforeseen immediate Emergency/contingency
need.
Large Cap Stocks: These are investments in the common stocks of well- recognized, large
companies that are expected to produce relatively
Secure and stable earnings.
Mid Cap Stocks: These are investments in stocks of mid-sized companies that are expected to
provide a blend of growth and earnings.
Small Cap Stocks: These are investments in common stock of relatively small, low
capitalization companies whose earnings are expected to grow at an above-average rate.
B) Analysis of the Data Collected: Questionnaire

1. Which of the following best describes your occupation?
Graph 1: Occupation of sample
Interpretation: The occupational level of the sample studied majorly varied from private sector to
public sector. There were also respondents who are businessmens, housewife and remaining 20%
belongs to other categories.
2. What best describes your annual income?
Graph 3: Income of the sample
Interpretation: The income composition of study was predominantly of income bracket 1 – 5 lakhs,
closely followed by 5 – 10 lakhs.
3. What is your age?

Graph 3: Age of the sample
Interpretation: The age group of study was predominantly of age bracket 18 years to 25 years, closely
followed by 26-35 years.
4) How much percentage of your income goes in investment?
Graph 4: Percentage of your income goes in investment .
Interpretation: 44% of the respondents invest less than 10% of their income in investments.
Please mark the following. - 5) Awareness about investment .
Graph 5: Awareness about investment ..
Interpretation: 52% of the respondents said that they possess good knowledge about the awareness of
investment , while 24%said they possess very good and excellent knowledge about the same.
Please mark the following. - 6) Awareness about the different modes of investment available.
Graph 6: Awareness about the different modes of investment available.
Interpretation: Half of the respondents said that they possess good knowledge about the awareness of
the different modes of investment available , while 32%said they possess very good knowledge about
the same.
Please mark the following. - 7) Awareness about the functioning of mutual funds.
Graph 7: Awareness about the functioning of mutual funds.
Interpretation: 56% of the respondents said that they possess good knowledge about the functioning of
mutual funds .
8) Have you ever invested your money in mutual funds before?
Graph 8: Investment in mutual funds before.
Interpretation: 76% of the respondents said that they have not invested their money in mutual funds
before.
9) To whom you would consults with before or at the time of investment?

Graph 9: Gathering of Information.
Interpretation: People who have bought investment products said that they first look for advice from
their families about the investment products before purchasing it. Other than that, it is Investment
advisor that become their first option on deciding to buy a product. It is evident that word of mouth
plays a very crucial role in purchase decision.
10) My investments are taken care by?
Graph 10: Investments are taken care by .
Interpretation: 54% of respondents said that their investments are taken care by their family members,
24% said that their spouse and 22% said that they themselves look after their investments .
Please mark the following. - 11) I think investing in stock market or equity funds is very risky .
Graph 11: Investing in stock market or equity funds is very risky.
Interpretation: Half of respondents agreed when asked whether investing in stock market or equity
funds is very risky , while 24% remains neutral and 22% strongly agreed on the same.
Please mark the following. - 12) I think investing in mutual funds is more profitable than bank FDs.
Graph 12: Investing in mutual funds is more profitable than bank FDs.
Interpretation: 48% of respondents disagreed when asked whether investing in mutual funds is more
profitable than bank FDs , while 34% agreed on the same.
Please mark the following. - 13) I have complete knowledge of the benefits of investing in mutual
funds.
Graph 13: Knowledge of the benefits of investing in mutual funds.
Interpretation: 46% of respondents remain neutral when asked whether they have complete
knowledge of the benefits of investing in mutual funds , while 34% agreed on the same.
Please mark the following. - 14) Do you want to invest in mutual funds in future?
Graph 14: Want to invest in mutual funds in future.
Interpretation: 46% of respondents remain neutral when asked whether they want to invest their
money in mutual funds in near future , while 42% agreed on the same.
15) Please rank the following," In which sector you would like to invest " - 1 Rank
Graph 15: Most important Investment Avenue.
Interpretation: 48% of respondents said that to them the most important investment avenue is the
“Bank savings and deposits” while Real Estate are also of great importance.
Interpretation: Out of the total respondents, one third said that to them the most important investment
avenue is the “Insurance” while Real Estate , Mutual funds and Bank Savings and Deposits constitute
22%, 26% and 20% of the total sample.
Interpretation: 30% of the respondents said that to them the most important investment avenue is the
“Insurance” while Real Estate, Mutual funds and Bank Savings and Deposits are also of great
importance.
Interpretation: More than one third of the respondents said that to them the most important investment
avenue is the “Mutual funds” while Insurance are also of great importance.
Interpretation: Majority of the respondents gave 5th rank to “Others”.
20) What are your expectations from investment product? - 1 Rank
Graph 20: Expectations from investment product.
Interpretation: Two third of the respondents said that they expects good returns from their investment
products.

Interpretation: Little more than one third of the respondents mark low risk as their expectation from
their investment products, followed by tax benefit 28% and good returns 26%.
22) What are your expectations from investment product? – 3 Rank
Interpretation: Little more than one third of the respondents mark liquidity as their expectation from
their investment products, followed by tax benefit 26% and low risk 24%.

Interpretation: Little less than half of the respondents mark stability as their expectation from their
investment products.
Interpretation: Little more than one third of the respondents mark liquidity as their expectation from
their investment products, followed by tax stability 32% and tax benefit 22% .
25) Choose in order of your preference for investing?

Interpretation: To get more information regarding their preference of investing in private players or
public players, 52% of the respondents prefer private players for investing their money.
CHAPTER 5
Findings, Conclusion and

Suggestions
CONCLUSION
The overall study about each and every aspect of this topic shows that Financial Planning is a
dynamic and flexible concept which involves regular and systematic analysis, proper management,
judgment, and actions.
It can also be concluded that client or Investors should start planning soon, set measurable goals,
Look at the bigger picture and should not expect unrealistic returns on the investments and value
of the plan lies in its implementation and it accurately reflects what you are personally trying to
accomplish.
It can also be concluded that with the combination of different stocks we can reduce the risk and
increase the returns of a portfolio. . By constructing portfolio we can only minimize the un-
systematic risk we cannot reduce systematic risk.
A proper Fundamental & Technical Analysis should be done before selecting any particular stock
for the portfolio. It minimizes the risk involved .
Financial Planning Service which was not so popular earlier as other services has gained lot of
importance and popularity & will gain more importance in future as people are now
understanding the importance of it.
Financial planning service is very important and effective investment tool for meeting your life
goals through the proper management of your finances.
SUGGESTIONS
To the Client:
The most vital problem spotted is of ignorance. Investors should be made aware of the benefits.
Investors should be made to realize that ignorance is no longer a bliss and what they are losing by
delay in planning.
Set measurable goals:
Set measurable goals that you want to achieve with a specific time. For example
What should be your lifestyle after retirement, or that to send children to good Schools
Start planning soon:

Delay in financial planning affects the whole big picture that he has in mind for himself and his
family. Developing good habits like saving, budgeting, investing and regularly reviewing
finances early in life, makes one better prepared to meet changes and handle emergencies.
Be realistic in terms of expectations:

Financial planning is a commonsensical approach to managing finances to reach life goals. It is a
lifelong process. There are certain extraneous factors like inflation, changes in macroeconomic
policies or interest rates that may affect financial results.
Understand the effect of each financial decision:

To realize that each financial decision that is taken affect several areas of his life.
To The Planner:
The planner should target for more and more young investors. Young investors as well as
persons at the height of their career would like to go for advisors due to lack of expertise and
time.
The planner should try to highlight some of the value added benefits, such as tax benefits,
systematic transfer plan, etc. Investors could also try to increase the spectrum of services
Offered.
The most important reason for not availing the serves of planner was spotted to be expensive.
The planner should try to charge a nominal fee at the beginning. But if no then they could go
for offering more services and benefits at the existing rate.
CHAPTER 6
BIBLOGRAPHY
BIBLIOGRAPHY
BOOKS, NEWSPAPERS and WEBSITES: -
I. BOOKS REFERED:
BOOK NAME AUTHOR NAME

1. Security Analysis & Bodie, Kane & Marcus
Portfolio Management
2. Financial Management I.M Pandey
3. Financial Planning Handbook IMS Preschool.
II. NEWSPAPER REFERED:

1. Economic Times and
2. Financial Express.
III. WEBSITES USED:

1. www.equitymaster.com
2. www.cmlinks.com
3. www.nse.com
4. www.nymex.com
5. www.netashare.com
6. www.idbifederal.com
7. www.investopedia.com
8. www.esnips.com
CHAPTER 7
ANNEXURE
QUESTIONNAIRE
1.Name: ----------------------
2. Which of the following best describes your occupation?
a) Private sector service
b)Public sector service

c)Business
d)Professionals
e)Housewife
f)Others
3 . Which of the following best describes your annual income.
a)Below 1 lakh
b)1-5lakhs
c)5-10lakhs
d)10-25lakhs
e)Above 25lakhs
4.What is your age?
a)18-25
b)26-35
c)36-50
d)51-60
e)Above 60
5 . How much percentage of your income goes in investment?
a)Less than 10%
b)10%-20%
c)20%-30%
d)More than 30%
. Please mark the following.

Excellent Very good Good Poor Very poor
6) Awareness
about investment.
7) Awareness
about the different
modes of
investment
available.
8) Awareness
about the
functioning of
mutual funds.
9. Have you ever invested in mutual funds before?.
a)Yes
b)No
10. To whom you would consults with before or at the time of investment?
a)Broker
b)Family
c)Friends
d)Investment advisor
e)None
f)Others, please specify
11. My investments are taken care by?
a)Self
b) Family members
c)Friends
d)Business partner
e)Spouse
f)None
e)Other, please specify
Please mark the following.
Strongly agree Agree Neutral Disagree Strongly

disagree
12) I think
investing in stock
market or equity
funds is very risky
.
13) I think
investing in
mutual funds is
more profitable
than bank FDs.
14) I have
complete
knowledge of the
benefits of
investing in
mutual funds.
15) Do I want to
invest in mutual
funds in future.
12) Please rank the following," In which sector you would like to invest "
Rank1 Rank2 Rank3 Rank4 Rank5

Real estate
Mutual funds
Insurance
Bank
savings/deposit
s
Others
13) What are your expectations from investment product?

Rank1 Rank2 Rank3 Rank4 Rank5
Good returns
Tax benefits
Low risk
Liquidity
Stability
18) Choose in order of your preference for investing?
a)Private players
b)Public players
Thank you for your Valuable time !!!

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A TRAINING REPORT

FINANCIAL PLANNING THROUGH INSURANCE

MAHARSHI DAYANAND UNIVERSITY

Satyug Darshan Institute of Engineering and Technology

This is to certify that Anmol Chopra of Satyug Darshan Institute of

Mrs. Sapna Taneja

Assistant Professor, BBA Department

Project Guide (Internal)

Mr. Ravi Bakshi

Department Coordinator (BBA Department)

S.NO PARTICULARS PAGE

Introduction to the study

Data Analysis & Interpretation

Findings, Conclusion and Suggestions

(a) A cooperative device to spread the risk;

(d) the method to provide security against losses to the insured

There are two different views regarding classification if insurance:-

I. Business point of view

1. Life insurance 2. General Insurance and 3. Social

2. General Insurance: The general insurance includes property insurance, liability

Type of General Insurance policies available are Health Insurance, Medi-Claim

II Risk Points of View

1. Property Insurance 2. Liability Insurance 3. Other forms of

1. Property Insurance: Property of the individual and business is exposed to risk of

(iii) Miscellaneous Insurance: It includes various forms of insurance including property

3. Other forms of Insurance: It include export credit insurance, state employee

IDBI FEDERAL LIFE INSURANCE CO. LTD.: At IDBI Federal, they

 NV signed a MoU to start a life insurance company

 2008: IDBI Fortis Life positive on assured return products

 2008: IDBI Fortis launches the Bondsurance Plan

 2009: IDBI Fortis announces Rs 250cr capital infusion

 2009: 'IDBI Fortis' Boss-Ka-Boss receives PRCI Award

 2009: IDBI Fortis launches Retiresurance Pension Plan

 2009: IDBI Fortis scores with Goalsurance

 2009: IDBI Fortis reaches the banks of Hoogly

 2009: IDBI Fortis launches Incomesurance Immediate Annuity.

 2009: IDBI Fortis reaches the City of Eastern Light

 2009: IDBI Fortis receives bronze Dragon at 'PMAA 2009'

 2009: IDBI Fortis launches Termsurance Protection Plan

 2014: IDBI Fortis to open 65 more branches; raise headcount by 1,000

IDBI federal Healthsurance Hospitalization and surgical plan offers host of

Homesurance protection plan provides full insurance cover for properties

Knowing customer helped us to combine the Endowment & Money Back

The main objective of this project on FINANCIAL PLANNING is to review the

An overview of the clients short and long term goals.

The client’s current financial strengths and weaknesses and implications of

The client’s financial objectives anchored to current resources.

A detailed summation of all recommendations.

A comprehensive economic overview of the client’s financial plan, supported by

A step-by-step implementation and monitoring plan.

Process of Financial Planning:-

The Planning Process:-

Let us look at the above steps in more detail.

A financial planner has to prepare a plan that helps his clients:-

 Improve their cash flows

 Lower their personal income taxes

 Plan for their retirement

 Improve their investment performance

 Lower their investment risk

 Insure themselves appropriately and reduce insurance costs

 Minimize their estate settlement costs

To achieve this, the planner needs to answer the following questions:

 What is the client’s current financial situation?

 What are the client’s immediate and long-term needs?