Book Review: SA Financial Planning Case Studies

SA Financial Planning Case Studies

SA Financial Planning Case Studies by Marius Botha, Paul Rabenowitz, Carl Muller and Janet Hugo

Drawing up a financial plan takes a lot more than just knowing about compliance, financial laws and products.

Analysing a client's circumstances and how they may reach their goals is likely to involve a variety of inter-related calculations and potential scenarios and a financial planner needs to know how to weave them altogether.

Beyond the calculations, a financial planner needs to know how to extract the right information from a client, to analyse it in relation to the client’s circumstances and to draw up an appropriate plan taking into account the client’s goals and any biases they may have. Finally, the financial planner also has to know how to present that plan and communicate its key messages to clients.

It is not something the typical financial planning textbook teaches and requires experience of working with real life cases.

Students of financial planning are expected to get as close to the real thing as possible when they are tested on practical examples. In particular, those studying a Post-graduate Diploma in Financial Planning need to pass the Case Studies module. This is also the prescribed work for the FPI’s Professional Competency Exam.

This new unique textbook is aimed at them, but it will be a valuable resource and benchmark for any financial planner who draws up financial plans in South Africa.

Lexis Nexis teamed up two top financial planning trainers, Marius Botha and Paul Rabenowitz, and two top industry practitioners, Janet Hugo and Carl Muller, to put the book together.

The book begins with a few suggestions on what should be in a good financial plan and reminds planners of the six steps of financial planning and the Financial Planning Institute’s Code of conduct.

The second part of the book provides a variety of simulated situations in which you can test your knowledge of code and the relevant calculations.

The situations cover all areas of financial planning from retirement planning, estate duty, income and capital gains tax, marital regimes, divorce and business insurance.

The answers come with the steps required to do the financial calculations.

In the third section of the book, there are eight longer scenarios and related questions to test your knowledge of a variety of topics including some questions on the fictitious clients’ behavioural biases.

In the answers students will find tips on what not forget when answering exam papers.

The last part of the book takes the planners and would-be planners through the development of a full financial plan for a 50-something couple. Business interests, being married for the second time, and an ex-wife are all in the mix to make the exercise more demanding.

The steps the financial planner takes and sample documents she uses are all set out in this section to illustrate what is required when following each step of the Financial Planning Standards Board’s Core Practices and the related Practice Standards.

The 40-page financial plan that is a product of the process is also reproduced in the book for future and current financial planners to see how their own plans compare.

The book’s progression from the shorter exercises through to the full-blown plan allows students to build know-how.
The answers to each problem provide enough information without being overwhelming and the layout supports an easier read.

The book is likely to become a must-have for all future students and any financial planner who has obtained a financial planning qualification without this book is going to wonder how they did it.