Our Personal Finance Agency Relationship

Personal finance planning is a full range of integrated, multi-level, personalized financial service for individuals and families, as China's rapid personal income growth and long-term accumulation of personal wealth along with the improvement of financial markets and policy, our personal finance planning market has developed substantially. China's personal financial planning market has grew quickly, financial products and services continuously enriched, and economic fluctuations and changes in the external environment increasingly influenced the personal financial planning market. However, in the contrast, that personal financial planning manager's income and the risk they facing becomes extremely asymmetric, the research of the principal-agent relationship between clients and personal finance planning manager, especially the mechanism of restriction and inspiration in personal financial planning becomes very important.In this paper, the concept of personal financial planning, its classification and its current development in China has been introduced, accordingly analyzes the problems that exist, and the ways to solve those problems has been discussed from the point of the principal-agent relationship. The key point of this paper is using the principal-agent model and reputation game model to analysis the principal-agent problem of our personal financial planning, and explore the methods to solve those problems that caused by information asymmetry. Finally draw lessons from the experience of foreign countries and propose limited partnership as the organization form of personal financial planning in our country, and analysis the promotion effect of limited partnership based on the models.Through research, this paper fundamental cause of the principle-agent problem is asymmetric information and the key is to design a kind of restriction, inspiration and selection mechanism to change the income sources of personal financial planning managers, to decline the cost of searching for high level managers, and to make the objective functions of the managers and customers in line as much as possible. Through model analysis, the traditional payment model cannot effectively inspire the personal financial planning managers, and a high level personal financial planning manager are more likely to choose the limited partnership, and comes to a conclusion that limited partnership can effectively promote the development of China's personal financial planning with the unique restriction, inspiration and selection mechanism.As our personal finance planning is just in the developing stage, professional managers are in extremely short, financial markets and legal system is still not perfect, thus based on the results of model analysis and the current situation of our personal financial planning market this paper suggests establish and perfect the law and code that related, breed personal financial planning manager market, advance the development of limited partnership corporations of personal financial planning.