Money Matters

Road map to financial freedom

Road map to financial freedom

Question: I have been hearing lately about financial planners and advisers about how they can help individuals better plan for their future. If I wanted to avail myself of the services of a financial planner, what should I be looking for in terms of deliverables and credentials?—asked at “Ask a friend, ask Efren” free service available at www.personalfinance.ph, Facebook and SMS.


Answer: Wise men say only fools rush in, or at least as the song goes. But in life, planning is indeed an invaluable activity, especially for the major things. And when it comes to goals that are impacted by money, (comprehensive) financial plans are indispensable.

Whenever we train financial advisers, we always tell that they should be the “go-to-guy” of their clients when it comes to money. Literally, that means that they should be able to provide objective and well-thought of advice to their clients on anything and everything that relates to money.


But to summarize, personal finance is all about four basic things: cash, debt, risk and wealth management. In this regard, our company, Personal Finance Advisers Philippines Corp. or PFA, coined the term EnRich CD-RW.

So, when you are looking for comprehensive financial plans, such plans should cover all of the four bases of CD-RW and in that particular order. But there is a twist with the CD-RW pillars of personal finance.

When it comes to planning, financial planners must be able to help you quantify your individual goals first and compare them to what you have to start with and what you can periodically add to your investments for the future.

The financial planner will then be able to determine the return you need to make for the risk you are willing to take. If there is a mismatch, he will guide you on how to make the proper adjustments.

What you have to start with and what you can add will have cash and debt management as their foundation.

Since prosperity begins with “S” or savings, budgeting or cash management becomes a critical foundation in financial planning. While debt can pull down finances, it can also boost the same finances if executed properly. That is why debt management is also of prime importance and part and parcel of the foundation in personal finance.

Then the financial planner should be able to quantify your individual goals and risk preference as guides through the maze of investments to help you find those outlets that are best suited for you to achieve the same goals. This is wealth management.


Only after your goals have been crystallized and the tools identified should the financial planner be talking about protecting your plans through risk management. For what is the point of getting insurance if there is nothing to protect.

But when it comes to execution, you should implement risk management prior to wealth management as nothing is guaranteed with investments. It stands to reason then that you should guarantee that your plans will still be implemented, even if you are called from this life early, by protecting your downside first.

As to the credentials of the financial planner, choose one who has years of experience. But even if years of experience are limited, having gone through a solid certification program on financial planning will help fill in the gaps.

Here’s to planning for a better future.

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TAGS: Business, Financial Freedom
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