A study on personal financial planning in UK and India with the help of case studies

Introduction

To understand this work, one needs to understand the concepts of financial planning. A financial plan acts as a guide on your life’s journey. Essentially, it helps you be in control of your income, expenses, and investments so that you can manage your money and achieve your goals. Thus, financial planning is a step-by-step approach to meeting your life’s goals.

Financial planning includes all the activities that apply general management standards to the financial resources of a firm, such as planning, directing, organizing, procuring, investing, and returning the funds. In this article, students will learn about the meaning, objectives, and features of financial planning.

Research methodology

This study is based on case study, which is real-time cases, and we have not done any type of survey or questionnaire because we are not able to take surveys in the UK, and without that data, we are not able to do any analysis. We take five Indian cases and three UK real-time financial planning cases. But in this study, we are presenting only two cases.

Findings

This study aimed to understand the financial planning industry in India, how financial planning is done in India and the UK, and study factors that affect financial planning. This study is totally based on case studies and existing UK clients.

Steps for financial planning in the UK are as follows:

Step 1: Collect Information: Collect information from the client, i.e., personal information, medical information, and many more.

Step 2: Excel Sheet: After collecting information, the next step is preparing Excel sheet. In Excel, we put the data that are obtained from the client. Excel makes work easy. Information include

● Policy number

● Existing fund value

● Amount of investment

● Name

● Transfer value

● Risk profile of client

● Charges

● Existing portfolio (allocation, active and passive fund, and charges).

Step 3: DEFAQTO: DEFAQTO is a tool used for fund research. This is obtained from the client and has all the details of the fund. Details like fund name, fund invested in, where invested, how much invested, charges levied, and fund return are obtained. If this is not obtained, then we have to find out everything including charges and projection (future value of investment).

Step 4: Illustration: The existing fund details and their projection are checked.

Step 5: Genovo: Genovo is a software used for creating the final report. In this software, we add every detail of a client and make final reports. We also add some sections that are important for the report.

The main sections include Introduction, Review of Existing Plan (Plan Summary, Add details of Existing Plan), New Investment Recommendation, Recommended Investment Strategy, and Important Information.

Step 6: FE Analytics: With this tool, we produced a pre-sale cost and charge report. The charges include platform charges, on-going adviser charges, on-going charge figures, and transaction charges.

Note: The name and other sensitive details are changed due to privacy protection.

Case 1: pension fund switch

Results

From these cases and other information, we found the following.

(1) In the UK, there is a proper process for personal financial planning. They have used some software to prepare financial plans. For example, they use the Genovo software to prepare the final plan report; they also use FE Analytics to calculate charges that are related to funds; FE Analytics helps fund man- agers collect, store, and share their fund data.

(2) In India, there is a different way to do financial planning. Indian people are not aware of how to invest, where to invest, or what products are there for investment. There is no proper structure for financial planning. For example, people only believe in their portfolio manager, and they invest their money in the products that are suggested by their portfolio manager.

(3) Every individual has different needs to achieve in their life; some have short-term needs and some have long-term needs. Depending on that, an individual makes the saving and investment decision. It is up to the individual to decide whether they want a retirement plan, hazard management plan, long-term investment plan, a tax saving plan, or a real estate plan. According to the needs, plans are given to the individual; this will help solve their needs.

(4) According to our study, we find that there are various factors that affect the financial planning of an individual, like risk, return on investment, age, goals and objectives, dependences, and health.

Steps in INDIA

In India, there is no financial planning structure. The policy is mostly taken by agents who chose the policy that gives them better commission. The policy that the public selects is due to influence from their friends or relatives or through agents. Following are the steps that are followed by the public:

Step 1: Gets the information from friends.

Step 2: After getting information without any rese- arch, the client goes to the agency that provides that company’s policies.

Step 3: The knowledgeable agent will take advantage of his knowledge and give the policy that is best for him.

Case of India 1

Personal information

Mr. Abhishek Patel is a salaried person. His monthly income is 150,000, and his monthly expense is 40,000. His age is 35 years. He is a married person, and his wife’s name is Geeta Patel. Her age is 31 years. He has two children: son’s name is Marmik (5 years old) and daughter’s name is Dhruti (2 years old).

According to their needs and objectives, we give the best plan to fulfill their future goals. We prepare an Excel presentation for our client and present it.

Limitations

1. In our study, we have no in-depth information on the topic.

2. Unwilling to reveal financial position.

3. There is also time bond for the project.

4. Company is a Start-up Company, so they do not have many clients.

5. In India, this business is still in the growing stage, so there is not much information about the topic.

6. This study is based on case study rather than a survey.

Conclusion

The comprehensive study about every aspect of this topic shows that financial planning is a dynamic and flexible concept that involves regular and systematic analysis, proper management, judgment, and actions. It can also be concluded that clients or investors should start planning soon, set measurable goals, look at the bigger picture, not expect unrealistic returns on their investments, and that the value of the plan lies in its implementation. It accurately reflects what you are personally trying to accomplish. With the combination of different stocks, we can reduce the risk and increase the returns of a portfolio. By constructing a portfolio, we can only minimize the unsystematic risk; we cannot minimize the systematic risk.

Author contributions

All authors have been putting forth their best effort to finish this article, joining a group that has already been working in this field, job with that organization as preplanning, and we are solving the investment problem for clients in the UK, India, and Australia, creates their own article, which we then compile and finish.

Acknowledgments

We are very appreciative of our guide, AS ma’am, for her continuous help in preparing this article. We are also appreciating our external guide, which is our organization where we are working as employees. In addition, this publication organization agreed to publish our article.

References