| While talking about fee only financial | | | | liquidity. The concern should be able to |
| planners, one thing should be taken into | | | | meet the maturing obligations in time. |
| consideration is that "Fee-Only" planners are | | | | However, maintaining of liquidity should not |
| compensated solely by fees paid by their | | | | be at the cost of profitability. It should |
| clients, and do not accept commissions or | | | | ensure economy also. That is, the cost |
| compensation from any other source. The | | | | associated with various financial decisions |
| National Association of Personal Financial | | | | should be the minimum. It should aim at the |
| Advisors (NAPFA) is the largest organization | | | | best possible use of the available resources, |
| of "fee-only" planners.The main function of | | | | especially finance. A poor balance between |
| fee only financial planners is to develop a | | | | fixed and working capital should be |
| sound financial plan. A sound financial plan | | | | maintained for using the capital |
| should be simple as well as practical. When | | | | effectively.The nature of business plays a |
| there is complexity in the financial plan the | | | | decisive role in designing financial plans. A |
| operating executives will find it difficult | | | | capital-intensive industry like iron and |
| to follow. It should be designed with a | | | | steel requires more capital. Besides, the |
| long-term view. While designing the | | | | stability and regularity of income, future |
| investment, financial and dividend policies, | | | | prospects of growth, and the fluctuation in |
| the long-term requirements of the concern are | | | | the demand for the product being manufactured |
| also to be considered. Sound financial | | | | by the firm play dominant roles in |
| planning requires vision and forecast. Proper | | | | determining the capital needs as well as |
| forecasting of the future is necessary to | | | | capital structure. The risk involved in the |
| design the financial plan. It should have | | | | business has significant bearing on the |
| enough flexibility to incorporate changes in | | | | determination of the capital structure. |
| the plans.Financial planning should ensure | | | | |