Belgian Association for Financial Planning

1. Belgian Association for Financial Planning May 2003

2. THE BELGIAN MARKET An evolution towards more sophistication ? 2

3. Summary overview of the Belgian market for financial planning services Marc Peeters President FinPlan vzw/asbl 3

4. STATUS OF THE PROFESSION • roughly 1,100 independent practitioners of financial planning services • no legally protected status • definition of financial planning concept varies according to the practitioner’s training and professional background • bulk of independent practitioners  certified insurance brokers  offering services and products in the areas of personal and professional risk coverage, asset management through universal life and unit linked insurance policies + limited tax, inheritance and real estate advice 4

5. STATUS OF THE PROFESSION • other authorized professions involved in financial planning services  asset managers and investment advisers, notaries public and estate planners, accountants, tax and legal advisers • specific training organized through postgraduate education  Master of Personal Financial Planning (University of Antwerp Management School), Advisor of Personal Financial Planning (INSERT Insurance Services and Training) 5

6. A MORE BLUNT APPROACH • six angles to look at financial planning in Belgium the in-crowdacademic and theoretical level  authors of vulgarizing books on financial planning  tend to monopolize the concept  training courses for bank and insurance company employees  few co-operation with independent practitioners  the marketeers sales and public relations level of banks and insurance companies  financial planning advice for free  teaser to attract customers  purpose is to sell more in-house products under the financial planning umbrella 6

7. A MORE BLUNT APPROACH • the would-be financial planners insurance broker level  extended specialist insurance product range leads to more sophistication  pragmatic view towards financial planning  experience of the profession often underestimated the specialists asset management, financial advisory and real estate planning level  certified professions (code of conduct, regulatory supervision)  specialized in one area of financial planning  often forget the « big picture »  co-operation essential to define the sphere of action of the financial planner 7

8. A MORE BLUNT APPROACH • the legal professions notary public, legal and tax consulting level (lawyers, tax specialists, accountants)  focus on tax and inheritance planning matters  co-operative attitude towards other independent professionals  need to be involved to define the financial planning concept and support its legal recognition  the private bankers high net worth individuals level (> 1 million EUR in transferable securities)  few independent houses remaining in Belgium  change of savings tax environment in Europe attracts foreign companies (high savings quote in Belgium)  family office concept  tendency to pay more attention to mass affluent clientele 8

9. THE NEED FOR FINANCIAL PLANNING Not an artificial gimmick but definite reality • complexity and profusion of tax laws • lack of legal structuring of inheritance (tax evasion instead of tax planning) • growing interest for personal pension schemes (demographic evolution) • abundance of investment products and asset management tools • investment risk awareness • increasing understanding of combined product advantages e.g. unit linked insurance policies 9

10. THE NEED FOR FINANCIAL PLANNING • importance of real estate investments and mortgage structuring • slow improvement of personal and professional risk management (overlap of insurance policies) • necessity for proper legal structuring of Belgian small to medium sized companies • dimension of savings account market  110 billion EUR or 1/3 of average family assets (the fear factor) Overall demand for synthesis – avoidance of fragmentation and overlap – in implementing the various financial advices 10

11. HURDLES TO OVERCOME (IN BELGIUM) • financial planning perceived as being only effective for high net worth individuals • client relations lack transparency, leading to conflicts of interest (commission is the forbidden word) • a fundamentalistic approach of independency puts off would-be financial planners • the lone wolf (Einzelgänger) mentality weakens the propagation of the financial planning concept • some government officials and lawmakers still tend to associate financial planning with tax evasion 11

12. FINPLAN’S MISSION • to become the home base and meetingplace of all professional intermediaries dedicated or sympathetic towards the concept of financial planning • to involve the specialist financial, tax and legal professions in determining the field of operation of the financial planner and enhance synergy • to adopt a pragmatic view with respect to the promotion of financial planning in the community of professional intermediaries by organizing seminars, workshops and training sessions and by offering useful tools such as specific software and a comprehensive website • to take all necessary steps towards the legal recognition of the financial planning profession 12

13. FINPLAN’S CORE VALUES FinPlan adheres to the core values of the (American) Financial Planning Association (FPA) • Competence  our dedication to competence requires not only lifelong learning, but also that we continually assess our ability to appropriately and effectively address the needs of those whom we serve • Integrity we strive to have ever more congruence between our words and deeds, and to deliver genuine value to those whom we serve 13

14. FINPLAN’S CORE VALUES • Relationships we are committed to open, inclusive and respectful relationships, including collaboration among diverse parties on common interests • Stewardship we recognize our responsibility to act with vision, ever mindful of the effects of our actions on the future 14

15. CONCLUSION Belgium has a large number of experienced specialists in the various areas of financial planning. The time has come for the generalist – the financial planner – able to co-ordinate and liaise with the specialist professions and present the client with tailor-made solutions and proper follow-up The future for financial planning in Belgium looks great ! Let’s get organized ! 15