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Guest Column KK Bajaj’s six-step process to make an ideal financial plan

KK Bajaj’s six-step process to make an ideal financial plan

Founder Chairman & Chief Mentor of the 50-year old financial distributors company Bajaj Capital, KK Bajaj shares tips on how to go about making a financial plan for your clients to strengthen client relationship.
KK Bajaj Jul 26, 2017

Financial Planning is a scientific process to ascertain needs, goals and aspirations of your clients and then recommend to them appropriate solutions from various financial product providers so that the client leads a disciplined, stress free and successful financial life.

Financial planner is like a doctor who first diagnoses the symptoms, looks into the patient's medical history and then prescribes the right medicine for treatment. The financial planner will first ask questions from his prospective client, then formulate a robust financial plan and execute it.

Financial planner's relationship with the client is not transactional. Instead, it is a lifelong relationship, sometimes, spanning across generations.

Here are the six essential steps for implementing the financial planning process in a correct manner.

1. Know Your Client

Financial planner must take all personal details of his prospective client like his profession/occupation, educational background, family background, details of dependent family members and personal contact details like email Ids, mobile phone number, land-line number, current address and permanent address. Likewise, financial planner should also introduce himself by sharing professional background, experience, contact details and terms of engagement.

2. Gather the data

After creating a rapport with the client, financial planner should ask for details of existing investments, ongoing insurance policies and the list of future financial goals including the time horizon and recommend funds required to achieve those goals comfortably. Financial planners may also use risk profiler to find out the risk appetite, as it will help them in recommending right set of solutions commensurate with client's risk taking ability.

3. Construct the plan

Financial planner should proceed to construct a detailed financial plan, which should include cash flow forecast and a snapshot of future scenarios. Generally, financial planners use time tested software to compile the plan. It is generally a document having graphs and descriptions.

4. Present the financial plan to the client

This is a crucial step in which financial planner should ensure that the financial plan created by him is clearly understood by the client. He should use simple language and avoid jargons to ensure that client is very confident as to how the financial plan will work for the accomplishment of his various upcoming goals. The plan should preferably be presented to both the spouses together so that both the husband and wife are involved in the process.

5. Execute the plan

Every financial plan will have several recommendations around investments in a few select mutual fund schemes or bonds and suitable life insurance and health insurance policies. Financial planners must execute the recommendations prudently and in the best interests of the client.

6. Constantly review the plan

After a plan has been implemented, it is imperative that the same is reviewed at regular intervals, which may be twice a year or quarterly. Clients' financial circumstances may keep on changing and hence it is important that financial plan is continuously monitored and changes made as and when required.

If the above-mentioned six steps approach is followed religiously, the relationship between financial planner and the client will be a long lasting one.

The views expressed in this article are solely of the author and do not necessarily reflect the views of Cafemutual.

11 Comments
nayan · 1 month ago
what is new in this. it is not k k bajaj financial plan. it is taught in Certified financial Planning course. Please, do not attach name of any guy.

this is very basic education of financial planning.
Shiv · 1 month ago
Basics are always same. It is all about how well you execute it.
Reply
Satya Deo · 1 month ago
Wheel reinvented by KKB
Vibhu Bansal · 1 month ago
The most important aspect is to advise the client in full honesty #UnitechFDScam in which BAJAJ CAPITAL advised to invest my hard earned money.
Vibhu Bansal · 1 month ago
This is with reference to your email to me on my above message wherein you have cited some cases

1. The NCLT hearings on date 08.05.2017. The matter was between Ms Madhubala Arora vs UNITECH. Ms Madhubala Arora had in her personal capacity approached NCLT. The advocate representing Ms Madhubala Arora was Mr. Manjeet Singh. Ms Madhubala Arora has got her money back. No role of BAJAJ CAPITAL in helping investors like myself to get their money from UNITECH.

2. The NCLT hearings on date 22.05.2017, 29.05.2017 and other dates. The matter was between Ms Mukta Devi Bagla and UNITECH. Ms Mukta Devi Bagla was represented by Mr. Satvik Verma. Again no role of BAJAJ CAPITAL in helping investors to even file our plea to NCLT.

Reality check: I have come across many people who have contacted the FD team of UNITECH and got their money. I, individually have connected with UNITECH and got almost 50% of my money without any help whatsoever from BAJAJ CAPITAL.

Stop fleecing people and taking a moral high ground. It is a fact that BAJAJ CAPITAL is only interested in giving horrible advise to get maximum commission at expense of investors.

Vibhu Bansal · 1 month ago
FD Holders of UNITECH can join our facebook page and WhatsApp group. There are many people who have got their money through some of the legal options suggested in the group. It has taken time and many small investors have been able to recover 100% of their principal amount.
Reply
Amit · 1 month ago
Traditionally rules always remain the same. A Good Read especially because it is from a man who is into this profession from more than 50 years.
Amit · 1 month ago
Traditionally rules always remain the same. A Good Read especially because it is from a man who is into this profession from more than 50 years.
SUSHMAJAIN · 1 month ago
INVESTED RS60000/ THROUGH BAJAJ CAPITAL FOR 3YRS FD MATURITY DATE03-12-2016. AS ADVISED BY RM SENT GRIAVANCE TO CLB APPLIED FOR REFUND ON MEDICAL GROUND ON21/03/2016. SENT COPY OF FD, CANCELLED CHEQUE,COPY OF PANCARD, HOSPITAL PRESCRIPTIONS, COPY OF CHEMIST BILLS TO CLB . ON06/04/16 SUBMITTED ORIGINAL FD RECEIPT TO UNITECH. NO RESPONSE TILL DATE. OUR FD NO IS1243841, FOLIO NO1004640, DATE OF DEPOSIT 03/12/13. I AM YOUR CLIENT SINCE LAST 45 YRS. KINDLY HELP US TO GET OUR MONEY BACK. WE ARE SENIOR CITIZENS. SUSHMA JAIN & NARESH CHAND JAIN , A-158, SOUTH CITY-I GURGAON-122007, T.NO --9312831789
KARUNA DAS · 1 month ago
As per recommendation of BAJAJ CAPITAL official I have invested in fixed deposit of Micro Technology and PLETHICO PHARMA which has been matured 2 years ago but till date I have not received maturity proceeds.
FD Client Care · 1 month ago
We understand your concern. To serve your better, kindly share your FD details at fd@bajajcapital.com. Our concerned team will contact you shortly and help you in best possible way.
Reply
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