Investment Planning Factors and Risk Management in Personal Financial Planning

Abstract

A number of financial institutes began the operations of personal financial planning service in Mainland China due to the economic development and the accumulation of family fortunes. However, compared with international development of personal financial planning, personal financial planning in Mainland China is still in a cradle without the conduct of influential and localized theoretic fruits. Individuals and families have no clear understanding to financial planning, and more they lack theoretic knowledge and practices of investment planning factors and risk management based on financial planning. By advanced financial planning theories and in a systematic way, this paper analyzed the three major factors of investment planning for personal financial planning: family life cycle, investment principles, and investor's risk appetite; and analyzed the five steps and the five types of approaches for risk management of investment planning, providing theoretic guide for investment planning in the financial planning of individual and families in China.