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Abstract

Personal financial planning is the process of making optimum utilization of available resources to achieve individual and family goals. Goal-directed personal financial planning helps people in determining where they are financially, where they want to be, and how they can get there.  However, people are exposed to wide-ranging risks in the financial goal setting process. These risks in turn have major financial implications on their wealth creation, wealth preservation and wealth distribution aspirations. While existing studies on the subject of personal financial planning focus primarily on insurance and investment related risks, there is not much literature available that explicitly addresses the issue of aligning risk management framework to the goal-directed personal financial planning. This conceptual paper attempts to critically examine the risks related to setting personal financial goals and suggest ways of treating identified risks to attain lifetime financial freedom. The paper also aims to provide academicians and planners in the financial services industry with an outline of the key issues to consider as they develop understanding of the risks associated with goal-directed personal financial planning.

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