Financial Planning
When it comes to thinking about our financial future, many of us don’t know where to start. With good financial advice, it all becomes very clear.
About Financial Planning
Financial planning is about developing strategies to help you manage your financial affairs and meet
your life goals – and the first step is to make sure you have access to the right advice. Working with a
professional financial planner can give you confidence and peace of mind that your financial future is
secure.
What are the steps?
DEFINING THE SCOPE OF ENGAGEMENT
Your financial planner should explain the process they will follow, find out your needs and make sure
they can meet them. You can ask them about their background, how they work and how they
charge.
IDENTIFYING YOUR GOALS
You work with your financial planner to identify your short and long term financial goals – this stage
serves as a foundation for developing your plan.
ASSESSING YOUR FINANCIAL SITUATION
Your financial planner will take a good look at your position – your assets, liabilities, insurance
coverage and investment or tax strategies.
PREPARING YOUR FINANCIAL PLAN
Your financial planner recommends suitable strategies, products and services, and answers any
questions you have.
IMPLEMENTING THE RECOMMENDATIONS
Once you’re ready to go ahead, your financial plan will be put into action. This document is
commonly referred to as a Statement of Advice (SOA).
Where appropriate, your financial planner may work with specialist professionals, such as an
accountant or solicitor.
THINGS TO CONSIDER
Your circumstances, lifestyle and financial goals are likely to change over time, so it’s important that
your financial plan is regularly reviewed, to make sure you keep on track.
Many financial planners offer a complimentary introductory meeting. The introductory meeting is
your opportunity to make sure that you feel comfortable with the financial planner’s professional
credentials, and that you get on well. Financial planning is a relationship business and not just a one-
off meeting. Ask plenty of questions!
A sure sign of a good financial planner is that they don’t rush you, carefully listen to you and clearly
explain where they can add value, and where they can’t. Here are some that you should consider:
WHAT QUALIFICATIONS DO THEY HAVE?
When choosing a financial planner, make sure they have the necessary qualifications. The simplest
way to do this is to narrow your selection to an FPA member many of which are CERTIFIED
FINANCIAL PLANNER® professionals who have achieved the highest financial planning qualification
worldwide.
WHAT EXPERIENCE DO THEY HAVE?
Experience is an important consideration in choosing any professional. Ask how long the financial
planner has been in practice, the number and types of firms with which they have been associated,
and how their work experience relates to their current practice. Enquire about what experience the
planner has in dealing with people in similar situations to yours, and whether they have any
specialised training.
IS THE FINANCIAL PLANNER LICENSED?
Always look for a financial planner who works for a firm that holds an Australian Financial Services
License (AFSL) issued by the Australian Securities and Investments Commission (ASIC). You should
ask for a copy of their Financial Services Guide.
WHAT DO THEY SPECIALISE IN?
Different financial planners have specific expertise in different areas, for example superannuation or
retirement planning.
Some are only able to advise on limited areas, so you need to make sure that your financial planner
is qualified in the areas that are relevant to you. It’s important that your financial planner’s skills and
experience match your needs.
HOW DO THEY CHARGE FOR THEIR SERVICES?
By law all financial planners must disclose all forms of payment and fees. The cost to you will depend
on the complexity of your financial situation and plan, as well as the fee method the planner uses.
There are various ways to structure fees, and it typically starts with an initial fee to identify your
needs, develop a strategy and implement their recommendations. There could also be
administration and ongoing service fees for regular reviews of your plan.
Financial Planners must ensure any fees you pay are clear and transparent, and make sure you understand
and approve the fees before they are incurred.