Differences between Islamic and Conventional Financial Planning
Financial planning is the process of creating strategies in managing financial affairs to meet life goals and the role of the professional financial planner is to analyse the financial circumstances of the client and to provide a plan to meet the client’s financial needs and goals. In carrying out his mission, the financial planner shall provide impartial assistance and act in the best interest of the client. For the Islamic financial planner, the role is the same except that when the client is a Muslim, the life goals are guided by the Shariah and the methods being applied must be Shariah compliant.
The difference between Islamic and Conventional planning is man’s time horizon where the Muslim will live in the Hereafter. Death is when the body and the soul are permanently separated and death can be viewed as the end of time for a person. The Muslim believes that he will be resurrected one day and be judged by his Creator and will continue to live in the Hereafter. This is a major tenet of the Islamic faith. In view of this, the Muslim has needs in the Hereafter and he must make sufficient preparations while living in this world. In conventional financial planning there is nothing to consider for the Hereafter because the conventional man has no notion of the Hereafter and not believe that he will be resurrected and judged by his Creator. All his efforts are for the life in this world, and death is the end of the conventional man’s time horizon. Thus, it is utterly important to bear in mind that in Islamic financial planning, both the planner and the Muslim client have to plan for and are truly concerned with goals and financial strategies for the Hereafter, unlike their conventional counterparts.
The foundation of Islamic financial planning is the Shariah that a complete guide for Muslims to live their lives in this world and for salvation in the Hereafter. This is also making Islamic and...
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