CJ Capital offers financial planning and education services. The education portion of our business is primarily delivered through personalized one-on-one meetings with clients, research into topics directed by clients, or through media such as this blog. The financial planning portion of our business is the focus of this article and will be discussed in more detail below.
Financial Planner
In general, a financial planner is someone that creates financial plans for individuals. A financial plan is a road map to help an individual achieve a specific financial goal, such as:
- retirement;
- saving for children’s education;
- purchasing a house;
- eliminating debt;
- estate planning;
- tax planning;
- insurance planning;
- small business needs;
- and any other goals requested by the client.
Although individuals are able to manage their own personal finances, one of the primary benefits of a financial planner is that they are an independent and expert third party, which can offer unbiased advice to help the individual meet their goals.
In Canada, it is important to note that there is no single regulatory body or designation for financial planners, but rather, there are a variety of designations associated with the industry. At CJ Capital, Craig Frenette is a Chartered Financial Analyst (CFA) charterholder, which is a credential regarded as the most respected and recognized investment designation in the world, and which demonstrates an ongoing commitment to professional ethics.
In addition to our professional qualifications, CJ Capital believes that it can best serve its clients by operating on an hourly fee basis and by being completely independent of financial service institutions. This allows us to build financial plans with our client’s best interests in mind, rather than trying to sell an affiliated product or service. Other financial planners may charge a fee based on assets under management, or receive commissions for selling specific products.
Financial Plan
ISO 22222:2005 defines a financial plan as a six step process:
- setting goals with the client;
- gathering relevant information on the client;
- analyzing the information;
- constructing a financial plan;
- implementing the strategies in the plan;
- and monitoring implementation and reviewing the plan.
CJ Capital follows this process, although our workflow is necessarily more detailed than that outlined above. In addition to the steps noted, our financial plans will typically include either implicitly or explicitly a discussion or consideration of factors such as:
- required return;
- risk and return tradeoffs;
- investor personality type;
- acceptable level of risk for a client, based on portfolio considerations as well as investor personality type;
- portfolio liquidity;
- time horizon;
- taxes;
- legal and regulatory factors;
- and any additional circumstances or factors specific to the client.
The Value of a Financial Plan
Studies have shown that there is a clear link between financial plans and financial health. A study of nearly 15,000 Canadians done by the Financial Planning Standards Council indicated that 81% of respondents felt on track with their financial situation, as compared to only 44% that did not have a plan. In addition, the same study reported that 62% of respondents reported that they had an improved ability to save for investments, compared to only 40% that had no plan.
Please contact CJ Capital if you would like to find out more about the financial planning and education services that we offer.