Tag Archives: EFPA

The full cycle in financial planning

Generation of proposals are part of the financial planning

Life is difficult to plan, but it is necessary to have some plans in certain circumstances. Plans cannot avoid troubles or negative surprises, but they can help deal better with them. This is the case of financial planning. What is it? The European Financial Planning Association (EFPA) explains that it “is usually a six-step process, and involves considering the client’s situation from all relevant angles to produce integrated solutions”.

The main target is knowing the customer in order to organise his or her finances for the whole life, so that the person reach his or her goals, keeps a similar standard of living and can manage unexpected events. The six steps listed by the EFPA are:

  • Establishing and defining the client and personal financial planner relationship.
  • Gathering client data and determining goals and expectations.
  • Analyzing and evaluating the client’s financial status.
  • Developing and presenting the financial plan.
  • Implementing the financial planning recommendations.
  • Monitoring the financial plan and the financial planning relationship.

Financial planning deals with all kind of assets (from cash to deposits, stocks or real estate) and life situations (worker, self-employee, retired, heritage). The main points are:

  • What are the main goals for the customer: is he or she planning to buy a house, save for the studies of the children, keep money with some annual returns for the retirement? We have to consider the age, the professional and the personal situation. Demands are not the same if the person is married or single or have one or several children.
  • What is the time horizon: after considering the goals, we have to think about a realistic time horizon to reach them. It will not be the same the timeframe for a house or for a car.
  • What is the risk profile: this is one of the main pillars, because the financial planner will propose the investment in appropriate assets. A conservative investor cannot receive a proposal with a half of the investments in stocks, for instance. There are several tools to profile investment risks, as the regulations are becoming harder to protect individual interests.

Individual investors can ask for the advice of a financial planner or be more independent using tools to organise their own plans. T-Advisor financial planner is one of the possibilities. What does an investor have to ask to this kind of tools?:

  • A chance to select different goals and time horizons.
  • An analysis of your risk tolerance.
  • A result with a range of possibilities from the more optimistic to the more pessimistic.
  • An analysis of tax and inflation effects.
  • A proposal of a combination of assets to reach your goal taking into account your risk tolerance and the time frame.

Nobody knows the future and financial planning will not avoid shocks. That is part of life. But financial planning can help organise your goals with a realistic view and react wiser to those shocks in order to keep a regular standard of living.

“T-Advisor rounds out and strengthens the learning of the future financial professionals”

Ph.D. David Pla-Santamaría, director of the Master

Ph.D. David Pla-Santamaría is the director of the “Master in Financial Advice and Insurances” in the Universidad Politécnica de Valencia. In its last edition, this master implemented T-Advisor as a learning tool for the students. Pla-Santamaría underlines the quality and professionalism of T-Advisor and how it approaches the students into the real work as a financial adviser.

What is the origin of the master? How many editions have been taking place? Tell us about the history and relevance for the future advisers.

The master comes from a shorter course organised by the Universidad Politécnica de Valencia for the managers of Fidenzis in 2007. The group was so satisfied with the course that they intercede with Bancaja to organise for this bank a 200-hour-course. The own professionals designed the programme for the course based on the daily needs detected by them.

We have organised 9 editions of the master and 24 from the European Financial Advice Diploma.

The relevance of these courses for future advisers is clear: the programme includes and exceeds what EFPA (European Financial Planning Association) asks for the EFA (European Financial Advisor) level. EFPA is a main player in the regulation of the financial advice as a profession in Spain and Europe. A good trainee validated by them is key to grow professionally in this branch.

How do you know about T-Advisor? Why did you decide to implement to your master? What did T-Advisor provide?

We knew the brand and the relevance of TechRules as a provider of information management for the financial sector for years. We also knew that it was a main player in Spain. We have clear since the beginning that the implementation of T-Advisor to allow our students “learn-doing” and apply all the knowledge from our course was a strategic decision. We used other tools in the former editions, but we needed a more professional one and with more quality. That is why we chose T-Advisor.

What positive aspect do you underline from T-Advisor for your students?

T-Advisor opens the door to a wide universe of assets to work with and to design personal solutions to specific problems or needs for real customers. Moreover, it focuses in a quantitative way the students in the decision-making and allows them to optimise portfolios, analyse their decisions, quantify their mistakes and good choices and, really, feel like a real financial adviser with a professional asset management platform at their disposal.

What would you propose to T-Advisor so that students had even a better experience to the real work as adviser with the platform?

I will use some of the answers of the students from a survey that we have conducted amongst them:

  • Add a wider universe of assets, above all, ETF and investment funds.
  • Include non-quantitative information for some assets, as the RF index.
  • More intuitive operations and graphic representation of the portfolios.
  • Include some orientations about the tax effects of the financial decisions.

How do you evaluate the T-Advisor proposal to be used in university courses as a tool?

It is very interesting in all levels. The possibilities of T-Advisor to round out and strengthen the learning in the classroom are key for a better training of the future professionals of the financial branch. Although the student use later the own platform of the entity where he works, he always will be able to continue making independent analysis with T-Advisor. This will allow the student to improve the quality of his advice for his customers. T-Advisor is a good tool to reduce the adviser conflict of interests between the customer and the entity.

When are you going to open the next edition of the master?

The editions of the Master in Financial Advice and Insurance in the Universidad Politécnica de Valencia are from October to December of the following year (15 months). That is why the next application period will be open in July 2016. However, we are aware that there are many people interested in getting a specialisation in financial advice that cannot wait till those dates. That is why we have an alternative course called “Financial Adviser Course” that covers the whole EFA level of EFPA. The application is open the whole year. The main difference with the Master is related to the teaching methodology and student monitoring.