Jimmy’s experience with a United Capital Wealth Advisor
Jimmy, age 28, is a research analyst for a Consulting company that has an office in Lekki, Lagos. He is single and no dependants. Jimmy desires to obtain his MBA at a top-tier business school. His educational endeavor will be a major expense. Jimmy monitors his income and spending. He also sets aside savings for investments as well as contributes to his retirement plans.
Jimmy shared his goal with Bode (a colleague and a friend) over a bottle of drink and the feasibility of actualizing his dreams. Bode used the opportunity to introduce him to his Wealth Advisor at United Capital and advised him to engage the Wealth Advisor on the concept of Financial Planning.
The following conversation ensued between Jimmy and the Wealth Advisor at United Capital:
Jimmy: What is financial planning?
Wealth Advisor: Financial planning is the process of seeking to meet your life goals through the proper management of your finances. Financial planning helps you make advance provision for financial needs that will arise in the future. The objective of financial planning is to ensure that the right amount of money is available in the right hands at the right point in the future to achieve an individual’s life goals.
Jimmy: Why should I make a financial plan?
Wealth Advisor: Financial planning provides direction and meaning to your financial decisions. It allows you to understand how each financial decision you make affects other areas of your finances. For example, buying a particular investment product might help you save adequately to finance your higher education, or it may provide enough for a comfortable retirement. You can also adapt more easily to life changes and feel more secure that your goals are on track.
Jimmy: Who is a financial planner?
Wealth Advisor: A financial planner is someone who uses the financial planning process to help you determine how to meet your life goals. The key function of a financial planner is to help people identify their financial planning needs, their present priorities and the products that are most suitable to meet their needs. He or she normally possesses detailed knowledge of a wide range of financial planning tools and products, but his primary role is to help clients choose the best products for each need. The planner can take a “big picture” view of your financial situation and make financial planning recommendations that are right for you.
Jimmy: Can I do my own financial planning?
Wealth Advisor: Some personal finance software packages, magazines or self-help books can help you do your own financial planning. However, you may decide to seek help from a professional financial planner if:
- You need expertise you don’t possess in certain areas of your finances. For example, a planner can help you evaluate the level of risk in your investment portfolio and revise your asset allocation;
- You don’t feel you have the time to spare to do your own financial planning;
- You know that you need to improve your current financial situation but don’t know where to start;
- You feel that a professional advisor could help you improve on how you are currently managing your finances;
- You have an immediate need or unexpected life event such as an inheritance or major investment decision to make;
- You want to get a professional opinion about the financial plan you developed for yourself.
Jimmy: How can I plan for tomorrow when I can hardly pay for today?
Wealth Advisor: Create a budget. Determine what you actually spend each month. There are fixed expenses like rent, loan repayments, etc. every month about which we can do little. The variable items such as food, clothing and entertainment are often what get away from us. Use your discretion to contain these variable expenses to start saving.
Jimmy: How much should I be saving?
Wealth Advisor: It is hard to apply a rule of thumb toward savings, because it varies with age and income level. Ten percent is a good start. If you find that is too high for you, don’t let that deter you. You can start by putting a little aside each month and then slowly increasing it.
Jimmy: What if I don’t achieve my goals?
Wealth Advisor: Financial planning is a common-sense approach to managing your finances to reach your life goals. It cannot change your situation overnight; it is a lifelong process. Remember that events beyond your control such as inflation or changes in the stock market or interest rates will affect your financial planning results.
Jimmy: Why do I have to provide so much personal information?
Wealth Advisor: Consider a visit to your doctor. Without complete and fully accurate details, your doctor cannot prescribe the best course of action. The same applies to financial planning. In order to obtain the best service for your “financial health,” all details and specifics must be disclosed.
Jimmy: What type of information do I have to provide?
Wealth Advisor: Typically, information regarding investments held, number of dependents, income and expenditure details, savings and financial planning needs, etc. The more accurate information you give, the better the quality of advice given.
Jimmy: What should a financial plan include?
Wealth Advisor: A financial plan should include a review of your net worth, goals and objectives, investment portfolio, cash flow, investments, retirement planning, education planning, estate planning and insurance needs, as well as a plan for implementing your goals.
Jimmy: After a plan is developed, what’s next?
Wealth Advisor: The best plan is useless unless it is put into action. Your financial planner will assist you completely in implementing the plan, if and when you desire.
Jimmy: How often should I update the plan?
Wealth Advisor: It is good to review the plan when there is a lifestyle change such as marriage, birth, etc. Any change in financial position should be evaluated as well. Most people have an annual update that reviews how the plan is being implemented. The review also considers changing goals and circumstances.
Jimmy: Do I have to meet my financial planner?
Wealth Advisor: That depends on what you need. We have an online financial planning platform (www.cccommunity.com) that you can access for the services. Based on your responses, we will be able to prepare a financial plan customized for you. If you require a more detailed session with a Wealth Advisor/financial planner, please call us at +234-1-2808862 or email us at firstname.lastname@example.org.
Jimmy: How much do I need to pay to have a financial plan put together for me?
Wealth Advisor: At United Capital, it is absolutely free provided you route your investment consideration through us.
Jimmy was accepted to the MBA of his choice and will be beginning the program in the Fall of 2019.