Applications of Shariah Financial Planning
What this domain tests
This domain tests integrated case work: fact-finding, goal prioritisation, product selection, documentation and monitoring across all earlier domains.
Core rules
- Start with the client's objectives, dependants, cash flow, existing assets, liabilities and risk exposures. Then apply Shariah filters to the whole plan.
- Prioritise liquidity and protection before long-term investment: emergency reserve, medical and family takaful, debt management, then zakat and tax efficiency, then estate documents, then retirement.
- Recommendations must be internally consistent. A takaful nomination must match the wasiyyah and faraid plan; a zakat calculation must use the same asset values as the net-worth statement.
- Document the Shariah basis for each product and the assumptions used. Review annually or on marriage, birth, business sale, inheritance or retirement.
Worked example
A 40-year-old entrepreneur has RM50,000 savings, RM200,000 business inventory, a RM500,000 personal residence, RM150,000 in EPF, a wife and two children, and no takaful. The planner first builds a six-month emergency fund in a Shariah-compliant deposit, then recommends family and medical takaful, then computes zakat on business inventory and cash, then prepares a wasiyyah and hibah review, then sets a retirement savings target. Investment comes after protection and liquidity because the family is exposed to business risk.
Traps
Product-first selling; ignoring zakat on business assets; inconsistent nominations; recommending long-term investments before emergency reserves; and failing to review after a life event.