Nelson Mandela Metropolitan University Module Details
PERSONAL FINANCIAL PLANNING (EBF201)
This module is presented as follows :
- SUMMERSTRAND CAMPUS SOUTH: Full-Time (A1)Can be used as a major: No
Offered in: Term 1+2
Credit value: 16
Estimated fees: R3460
Lecturer(s): GOLIATH, JE;
The overall module objective is to equip students with a broad perspective of the fundamentals of personal financial planning with specific reference to the following key areas of personal financial planning:
- the financial services environment and related legislation;
- the Financial Services Board and other regulatory bodies;
- asset types;
- short-term insurance;
- long-term insurance;
- retirement fund types and the six-step financial planning process.
Introduction to Financial Planning
- Understand and explain the fundamentals of financial planning.
- Identify the main role-players in the financial planning environment.
- Discuss the other role-players in the financial services industry.
- Understand and discuss the main consumer protection bodies in the industry.
- Demonstrate an understanding of the factors influencing the financial planning environment.
- Demonstrate an understanding of the role of the Financial Services Board.
- Identify and discuss the main acts administered by the FSB.
- Understand money market instruments.
- Compare and demonstrate an understanding of the various money market products.
- Discuss the advantages and disadvantages of investing in money market instruments.
- Understand capital market investments.
- Demonstrate an understanding of the difference between interest-bearing and discounted investments.
- Calculate the purchase price of a bond in the secondary market.
- Explain what is meant by equities.
- Discuss the requirements for listing on the various boards of the JSE.
- Recognise the difference between various types of shares available in the market.
- Explain how to read the prices in the newspapers.
- Understand how to value an equity investment.
- Understand risk and return in relation to equity investments.
- Understand the basic tax implications of investing in equity instruments.
- Recognise the different property portfolios available to the investor.
- Identify the advantages and disadvantages of investing in property.
- Understand the tax implications of investing in property.
- Discuss the types of hard assets.
- Demonstrate an understanding of liquidity, risk and return.
- Demonstrate an understanding of derivatives, futures and options.
- Compare the advantages and disadvantages of using the various instruments.
- Demonstrate an understanding of the principles of trading futures and options.
- Demonstrate an understanding of the operation and types of collective investment schemes.
- Understand unit trusts and the use of them.
- Understand the various retirement fund options.
- Explain the difference between insurance and assurance.
- Understand life assurance and the various life assurance and ancillary products in the market.
- Demonstrate an understanding of offshore investments and the reasons for investing offshore.
- Understand the basics of insurance.
- Differentiate between personal accident insurance and sickness insurance.
- Understand and discuss the different classes of motor insurance.
- Explain fire insurance and other property insurance.
- Understand and discuss theft and all risks insurance.
- Describe the different types of liability insurance and indemnity insurance.
- Explain multi-peril insurance.
Long term Insurance
- Understand the main provisions of the Long Term Insurance Act.
- Explain the technical aspects of long-term insurance policies.
- Explain the taxation of life insurance companies and funds.
- Discuss the provision of disability benefits.
- Demonstrate an understanding of the differences between pension and provident funds.
- Explain the different types of pension and provident funds.
- Explain the difference between defined benefit and defined contribution funds.
- Understand preservation funds.
Six Steps of Financial Planning
- Understand and discuss the compliance requirements when establishing a professional relationship.
- Discuss the information and data gathering process.
- Explain information and data analysis.
- Describe the process of preparing and presenting recommendations.
- Discuss the implementation stage of the planning process.
- Explain the process of review and monitoring.
- The Financial Services Environment and related legislation:
- Rudiments of the SA Financial System.
- Financial Intermediation.
- Financial Intermediaries in SA.
- Other financial bodies.
- The Financial Services Board and Regulatory bodies:
- Focusing on legislation related to the financial services industry.
- Asset types:
- Introduction to the different asset types.
- Risk inherent in these assets.
- Taxation issues relating to the various asset types.
- Long-term and short-term products which could be formed by combining different asset classes.
- Short-Term Insurance.
- Long-Term Insurance.
- Retirement Fund Types.
- Six Steps of Financial Planning.
1 x 3-hour examination, 50% class mark + 50% examination mark.
*Class mark = 60% (average of two semester tests) + 40% (assignment).
PREREQUISITES NEEDED FOR THIS MODULE
- Mathematics For Accounting (MACC101)
- Business Statistics (STAE102)