The importance of financial planning

The Northcliff Investors held a breakfast meeting at the Benvenuto Conference Centre on 10 March. The discussion of this meeting centred around recent developments of the 2015 budget and the effect it will have on financial planning in South Africa.

The guest speaker at the meeting was Sundresan Moodley.

Moodley’s working career has taken him through various senior positions in the financial services industry. He has extensive international and national experience in life insurance distribution, and currently is the Regional Manager for the Professional Provident Society (PPS).He is a qualified CFP professional, with an interest in financial planning for consumers.

He started by explaining why people need financial planning, the reasons involve the dangers of:

– Disability/dreaded disease.

– Hospitalisation.

– Dying too soon.

– Living for too long.

– The influence of inflation and tax.

Moodley stressed that unforeseen financial setbacks are the main reason why financial planning is sometimes hampered.

With regard to his impression of the 2015 Budget Speech, he simply stated that he was disappointed. “I had low expectations and I left disappointed,” he said.

He also pointed out a number reasons why investors should be speaking to their financial advisers following the recent developments from the Budget Speech. These reasons included:

– The current fragile state of the foreign capital.

– Eligibility and conditions for wealth tax.

– The fact that wealth tax has remained relatively unchanged regardless of the fact that the national treasury has reported potential change.

– The existence of disabilities income replacement policies.

Moodley explained that financial planning is quite an involved process and should be handled with the utmost of care. “Planning shouldn’t be taken lightly like choosing candy in the candy shop. A lot of careful planning should go into making sure that one’s individual financial plan is adaptable to one’s own lifestyle,” he said.