What is Financial Planning
Generally we distinguish three levels in financial intermediation.
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.
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.
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.