Question

Interview 1:

Utilizing the internet, friend, relative or personal connection; find a Financial Advisor; Certified Financial Planner or someone in the Financial Services Industry. Ask for his or her assistance for the next month or week. Your assignment is to interview this person and get their opinion on the following topics.

1. Describe a comprehensive financial plan.

2.What steps can be taken to ensure the success of a financial plan?

3. Explain how the plan utilized the time value of money. What areas was this concept applicable? Was it used in retirement planning, college funding estate planning or any other area of financial planning.

4.What are the some of the benefits of home ownership?

5. What are some of the impacts of low interest rates?

6. Please pose this hypothetical question to the interviewee: " I want to buy a car. What should be my concerns?"

Answer 1

Solution: The answer to the interview kind of question can be structured as below:

Introduction - A one sentence introduction about the concept or discussion brought up in the interview question.

Key Points - Two- Three points which the interviewee answered in a brief one or two paragraphs each and includes the various theories for the concept.

Discussion - A further elaboration of the points mentioned in above points.

Conclusion - A brief conclusion on the discussion and reiteration of answer by the interviewee.

Key Points for Q1: A comprehensive finanical plan is one that analyses the entire financial situation of an individual and takes into consideration his short term and long term financial goals.

A well-made financial plan will have various facets like Investment Management, Risk Management, Child education planning, Planning for Hobbies like travel, Retirement Planning, Tax estimates and estate planning covered in a detailed manner.

It will also take into consideration the current state of economy and how the macro economic situation will impact your financial plan. Also it will have inbuilt mechanism to take care of any risks that include untoward incidents like death or unplanned expenses.

A financial plan will make sure that a decision taken in one facet does not have a negative impact on the other facet of your financial plan.

For example, if you plan to take a holiday vacation, it should not be at the expense of depletion of your retirement corpus.

Thus a comprehensive financial plan should be well-researched after taking all the financial details of an individual and taking into consideration all his short term and long term goals.

Key Points for Q2: To ensure the success of a financial plan the planner must decide on measurable goals for the financial plan, along with the defined timeline.

The financial plan should take all the income and expenses of the individual into account and then design a plan that suits his requirement.

Once finalised, the plan should be reviewed at frequent intervals to ensure that the risks and the investments that do not work are modified to get better returns in the future.

Finally, the plan should invest money in different asset classes to minimise risk and diversify the financial portfolio of the individual.

Key Points for Q3: The time value of money concept will be applicable to all the areas which manifest over a period of long time for an individual.

It will be applicable to areas like Retirement Planning, Child Education planning and investment planning that are key areas of a financial plan.

Key Points for Q4: Benefits of home ownership include the fact that your are building your own asset, which will appreciate in value over a period of time.

Home Ownership also takes care of unpredictability and rent issues that one may face, along with the fact that you can save a lot of tax on home loans.