“Generally we distinguish three levels in financial intermediation.”

Selling

Probably everyone in Slovakia has experience mainly with sales of financial products, either recently expanded selling of products aimed at life insurance or other. Sales of a particular product without carefully assessing the client's current situation and his goals (a process of financial analysis) brings no added value for clients and can also cause harm in most cases.

Advisory

The advisory is currently the most widespread presentation form of financial products intermediation. In most cases, however, the advisory is only a hidden sale. In a better case, a financial analysis is processed with the client, and thereafter he is referred to particular „the most advantageous“ financial products. The only difference between sales and advisory is the breadth of the portfolio available for the broker. As a general rule - when someone offers specific products and their benefits, it is always a sale, regardless of the name of the service.

Planning

In other words, economic life planning is a detailed process of analyzing the client’s current state, assessment of his income and expenditures (cash flow), assets and liabilities, a detailed audit of his financial contracts, as well as determination of the client`s specific objectives. A financial concept or more likely a financial optimization is developed based on all this information.

CPM Associates financial planning is built on the philosophy of processing the financial concept on the base of rigorous analysis rather than selling specific financial products. Products are not an essential part of the concept, but in many cases their use may be crucial. High quality financial planning takes full qualitative and knowledge accountability for its recommendations to clients as an essential condition of the advisory ethics.

CPM Associates is neither proprietary nor financially linked to any financial or intermediary company and it strives to provide impartial solutions to its clients through an in-depth analysis.

Using selection and examination of financial institutions and their products based on detailed comparisons of fundamentals at regular intervals, we strive to provide clients with the highest efficiency, quality and suitability within the financial market.

The financial concept is supported by a wide range of products and solutions in the field of investment, housing, retirement income security, life and non life insurance. Among our main competitive advantages one may find mainly professional solutions in the field of investment, management of the first slovak hedge fund (Slovak Hedge Fund), direct access to global exchanges and over 15,000 mutual funds available.

The company operates in the market for financial services under the Act no. 186/2009 Z.z. as a single financial agent (SFA), which is authorized to conduct business of financial intermediation in all belonging sectors.

“What should be each client interested in.”

Financial literacy

Financial literacy is a knowledge of basic financial rules, relations, opportunities and risks in personal finance. It is important for every individual and absolutely indispensable for persons working in this field. Nowadays, however, there are many people working in the field of financial intermediation/ advisory without the basic knowledge of this issue and therefore a high risk of harm to the client occurs.
An important question: Can you show your financial status, your income and expenses, assets and liabilities and their overall result?

Expertise and Education

Academic education is certainly important and beneficial, but not absolutely necessary for this profession. Much more important is the expertise in what the person has been doing. This can be achieved by an intense education under expert guidance and through practice, by which one obtains an important insight and experience.
An important question: What is your education, skills and experience?

Professionalism

A professional does his work as a principal occupation, thus as his main earning activity and not as a part-time job alongside other work. The one who is concentrated on one area usually has room for better education, professional growth and sufficient number of experience. Certainly you wouldn’t want to be operated by a surgeon, who after eight hours of work time changes his construction worker overall for a doctor‘s robe. The reality of today's financial intermediation market is such that 80% of all advisors in this area have another major employment and perform advisory as a part-time job or alongside other principal activities.
An important question: Do you do this work as a principal activity or have another job? Why?

Ethics

All previous requirements are absolutely irrelevant, unless they are accompanied by ethical and moral principles of the intermediary. Ethics in financial intermediation is the most essential requirement, which an intermediary in financial services in the relation to his client has to meet. If money would be the only motivation for the consultant, the client should start worrying.
An important question: Why are you doing this work now? What is your main motivation?

The policy of quality management in the CPM Associates is present at all levels of our four divisions and it is an inseparable part of the global company management policy and its goals. We consider the Total Quality Management our highest priority and regard it the most esssential aspect of our company existence and its future successful development. The company's management is fully aware of the importance of implementation of the quality management system and its impact on the company`s current and potential clients, employees and co-workers.

TQM - Total Quality Management is the attitude, philosophy, but also a process that emphasizes personal responsibility of all employees who seek to improve continuously. TQM is a system consisting of organizational, administrative and technical procedures, methods, techniques and tools.

The concept of TQM is mainly focused on the customer and company’s own employees, respectively company’s associates, as well as business processes, work environment, goals and results. The whole company, all sections and people are involved in improving the quality of work. Managers, employees and associates are responsible for the company and the company bears responsibility for the people. TQM is an open system to which it is possible to include everything that can contribute to maximize the client satisfaction, their trust and minimize resources spent on errors and shortcomings.

CPM Associates considers the system of work an important aspect of the operation of the Financial Planning Division. The concept of working with clients is built to meet internationally recognized standards in the field of professional financial planning and financial audit. By applying the Total Quality Management (TQM) to the system of work with the client we strive to achieve such level of control and process management which enables the company to provide client services in the highest quality possible.

The system of work with the client is built on three pillars.

Financial Analysis

Financial analysis consists of several parts:

Client’s objectives

Every person has different dreams, desires and goals. The aim of this analysis is to identify which goals are the most important for the client. The areas in which we provide help to our clients are:

• Property protection
• Liability for damage
• Income and family protection
• Government grants and subsidies
• Housing planning
• Securing retirement
• Investment planning
• Asset management
• Financial optimization
• Cash flow management
• Risk management
• Tax optimization

Financial audit

It is an in-depth examination of existing contracts with the financial market and assessment of their suitability for the client in terms of objectives the contracts were agreed upon as well as from the perspective of efficiency of their use. Due to low expertise and financial literacy of financial intermediaries, but also because of a poor system of commission remuneration as well as excessive pressure on performance, products of no fundamental importance for clients are signed, or clients are even harmed very often. The result of the audit is to develop an optimization, which aims at using the client funds in a more efficient way.

Cashflow - Balance Sheet

This section reviews and assesses the client's assets and liabilities, his incomes and expenditures. Altogether this information creates an overall picture of his financial situation. To assemble the financial plan correctly it is necessary to know all the details and circumstances which may affect the overall outcome.

• Income from employment - gross, net, bonuses, number of salaries, length of time worked, job security
• Income from business - annual turn-over, tax base, contributions, earnings share, income
• Parental and child allowances
• The financial reserve - the amount, liquidity, risk
• Passive income - the type of income, level of liquidity, risk of the assets
• Retirement benefits - income stemming from years worked (in case of some public jobs - e.g. policemen, soldiers, etc.), retirement income, survivor income, widow income
• Detailed summary of expenses - housing, mobility, insurance, household, kids, lifestyle, savings and loans
• Assets - the type of asset, risk, liquidity, P/E ratio (price / earnings), ROA (return on assets), the fair value
• Liabilities – type of loan, principal, interest rate, APR, payment, maturity, balance, security, objective, burden, penalties
• Only based on all these information and facts a professional financial plan reflecting all the aspects and ensuring an effective completion of all client‘s goals can be established. Everything else is just selling.