This presentation on Islamic Financial Planning was given by Mr. Akmal Jameel, CEO Khabeer Financial Services at Meet the Experts session at Second Islamic Finance Expo & Conference 2013, Karachi.

1. www.khabeer.com.pk
Islamic Financial Planning
June 2013
Presentation on:
Second Islamic
Finance Expo &
Conference 2013

2. Contents
 What is Islamic Financial Planning
 Riba-free investment products in Pakistan
 Who are you?
 Earners considerations
 Earners financial planning process
 Retiree considerations
 Retiree financial planning process
 High Net Worth considerations
 Corporates, endowments & funds
Slide # 2June 2013

3. What is Islamic Financial Planning?
 Planning your savings and investments
 to achieve your financial goals
 using riba-free financial products
 of the appropriate risk.
Slide # 3June 2013

4. Riba-free Investment Products
 Islamic banks and Islamic windows of :
 Saving accounts (~6%)
 Deposit / investment accounts of various tenures (6-9.5%)
 Riba-free mutual funds:
 Fixed Income – Government and Bank (~7.5%)
 Fixed Income – Moderate Risk (~7.6%)
 Fixed Income – Corporate Risk (~10% - somewhat variable)
 Asset Allocation / Balanced (~20% over past 3 years - very variable)
 Equity (~30% over past 3 years – very variable)
 Voluntary pension schemes
Slide # 4June 2013

5. Riba-free Investment Products
(Continued)
 Takaful (Islamic Insurance):
 Whole life policy (risk protection + investment)
 Term life policy
 Accidental death & disability
 Hospitalization and health policy
 Car policy
 House content and house policy
 Real Estate
 Commodities & other complex products
Slide # 5June 2013

6. Who are you?
 An Earner
 Building up equity through savings
 Early, middle and late stage earners
 A Retiree
 Have retired and want to earn an income on your savings
 A High Net-Worth Individual
 Substantial wealth - may want to earn income for financial
independence or provide for future generations
Slide # 6June 2013

7. Earner Considerations
Slide # 7June 2013
 Income going to:
 Consumption
 Non-financial investment
 Savings to achieve financial goals
 Risk consideration in investments:
 Time horizon of goal
 Inflation vs risk
 Risk tolerance

8. Earner Financial Planning Process
Slide # 8June 2013
 Eliminate debt – especially high cost debt
 Protection against emergencies
 Save for an emergency fund – very low risk investments
 Appropriate takaful plans
 Short term goals
 Time horizon of up to 3 years
 Save for car, umrah, house renovation, etc.
 Safe investments such as 1 year bank deposits and riba-free
income mutual funds

9. Earner Financial Planning Process
(Continued)
Slide # 9June 2013
 Long term goals
 Time horizon of 4 to 30+ years
 Save for house purchase, retirement, capital for own
business, etc.
 Inflation is a greater risk than financial volatility
 Risky, long horizon investments
 Equity and real estate are the only investments in Pakistan
that protect against inflation over the long run

10. Retiree Considerations
 At least a basic income
 Based on your lifestyle
 Income growing with inflation
 Although current inflation is around 8% it has touched 20% in the
past
 Income for life
 Income should last at least till the life of the retiree and spouse
 Risk appetite
 How much risk the retiree is comfortable bearing
Slide # 10June 2013

11. Retiree Financial Planning Process
 Prepare for Retirement
 Start saving early for retirement
 Ensure that all debts are paid-off by retirement date
 If possible, have your own dwelling – optimize house size for retirement
 Gradual changes in lifestyle so that it is compatible with your expected
income
 Look around for income opportunities during retirement to live an active life
 The 70:30 investment plan
 Invest 70% in low risk plans and funds with a view to consume them during
the next 15 years – best would be a 80% riba-free income and 20% equity
mutual fund plan
 Invest the remaining in equity heavy plans or equity funds
Slide # 11June 2013

12. High Net-Worth Considerations
Slide # 12June 2013
 Income for financial independence
 A separate trust of income vehicle that would give enough income
indefinitely to maintain your lifestyle
 Financial Independence for Future Generation
 Set-aside of enough money so that your children, grand-children
and future generations
 Separate investment accounts for each family member
 Trust funds with indefinite life

13. Corporates, Endowments & Funds
Slide # 13June 2013
 Corporations / businesses
 Invest surplus funds in low risk riba free products (bank deposits & mutual
funds) for extra income
 Endowments / NGOs
 Funds for current and near-term spending in low risk riba-free products
(bank deposits & mutual funds).
 Long-term and permanent funds in inflation protected investments such as
equities & real estate
 Provident / Retirement Funds
 Balanced asset allocation with equities between 10%-30% based on age
profile of members. Some equity needed to combat inflation. Remaining in
riba-free income products.

14. THANK YOU FOR YOUR ATTENTION
PLEASE VISIT WWW.KHABEER.COM.PK TO LEARN
MORE ABOUT RIBA-FREE INVESTMENTS
We at Khabeer Financial Services pray to Allah the Al-Khabeer (the all-knowing, the
expert) that we are able to provide wise advice and correct information that acts to the
benefit to our clients and that we are able to improve and extend the Shariah Compliant
financial industry in Pakistan.
Slide # 14June 2013