Financial Planning

About financial planning

If you could achieve your financial goals by simply putting money away in the bank, you wouldn’t need a financial plan. Unfortunately, life is a little more complex – it’s hard to understand the intricacies of investment, taxation and ever-changing regulations, so you need professional help.

A professional financial planner will help you reach your goals; even if retirement may seem a lifetime away, the sooner you start planning the more likelihood you’ll have to achieve financial independence and peace of mind. They have the expertise and ethical standards to ensure your finances are in safe hands.

Many people end up forming a long-term relationship with their financial planner, similar to an athlete who works with a coach to improve their performance and reach their potential. The value of financial planning goes beyond dollars and cents – it can simplify your life and give you a sense of security and peace of mind about your current and future financial position.

How it works

It’s important to make sure you are comfortable that your financial planner has taken the time to understand your needs, goals and preferences before they make any recommendations. Here is what you can expect from the financial planning process.

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. Where appropriate, your financial planner may work with specialist professionals, such as an accountant or solicitor.

REVIEWING THE PLAN

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.

FIND A FINANCIAL PLANNER

FPA members represent the highest professional and ethical standards in financial planning. Use our Find a Planner service to find one near you.

Things to consider

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.

ARE THEY A MEMBER OF THE FINANCIAL PLANNING ASSOCIATION (FPA)?

The FPA is Australia’s leading professional community of financial planners. Members of the FPA sign up to stricter criteria and higher professional and ethical standards than required by law. They are obligated to put your interests first, at all times.

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.

Unlike other financial planners, FPA members abide by a remuneration policy that ensures any fees you pay are clear and transparent. An FPA member is required to make sure you understand and approve the fees before they are incurred.

FIND A FINANCIAL PLANNER

FPA members represent the highest professional and ethical standards in financial planning. Use our Find a Planner service to find one near you.

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