1.5 The Role of the Financial Planner

Acknowledgements

Firstly, I would like to thank Almighty God for the guidance and wisdom in enabling the smooth completion of this book despite the many challenges encountered along the way. I would also like to thank my family for their love, understanding and support throughout this project.

I extend my appreciation to Professor Mohamed Ariff Syed Mohamed, Distinguished Professor and Head of the Department of Economics and Finance, Sunway University Business School for the space given to me to research and reflect on the contents of this book as well as my colleagues at Sunway University Business School for their moral support. I also acknowledge and am grateful for the contributions from my colleagues at the Centre for Commercial Law and Justice, Professor Cheah You Sum for Chapter 9 General Insurance, and Sri Bala Murugan Gogula Nathan for Chapter 10 Estate Planning, as well as Nasaruddin Zainal for his general contributions, especially regarding takaful insurance in Chapter 8.

I would like to thank Dr Desmond Chong, Deputy President of the Malaysian Financial Planning Council for his continual support and encouragement to this project, as well as the Malaysian Financial Planning Council for the endorsement of the book. I would also like to thank Ms Linnet Lee from the Financial Planning Association of Malaysia for writing the foreword and Puan Siti Aminah Mainal of UiTM for supporting the book.

This book will not have been possible without the help of editorial and administrative support of the Scola Books team, especially Ms Carol Wong, Ms Hani Hazman, Mr Nicholas Hoe, as well as all the others who have worked diligently behind the scenes to bring this book to fruition. Many thanks also to the reviewers of this book who have contributed their time and effort in enhancing the contents of the book.

Last but not least, I would like to dedicate this book to the readers and students of this text and Malaysian youths in general with the hope that it would motivate and add value to them in their journey towards achieving financial freedom.

1Chapter Introduction to Personal Financial Planning

LEARNING OUTCOMES

At the end of this chapter, you should be able to:

• Describe the importance of the financial planning process • Apply the SMART model in setting financial goals • Describe the financial planning environment in Malaysia • Describe the roles and responsibilities of the financial planner

1.0 What is Financial Planning?

Do you realise that even in ordinary commonplace situations in life, the things that you do may affect your limited financial resources? For example, it may seem obvious that if you need to drive to an important meeting in the early morning, you will need to decide on the best time to start and the shortest or fastest route to take. If you wake up late, you may miss an important opportunity to close a sales deal and lose out on potential income. If you do not plan your commute well, you may end up taking a longer route or be stuck in traffic, incurring more fuel costs and possibly greater car maintenance costs as well.

In life, time and financial resources are limited. As the sayings go, ‘Everything involves money’ and ‘Time is money’. Some people say that they would only start financial planning when they have more income. When they do have more income, however, their personal and social lifestyle preferences may have changed. The fact is that if we do not have proper financial planning, we may end up spending more than we should even if we have a higher level of income. This would leave us with greater expenses and possibly very little savings. In this respect, many people find managing money a real challenge in life.

By failing to prepare, you are preparing to fail.

Benjamin Franklin