What is financial planning?
● Financial planning advice helps you make the most of what you have while you create a
comfortable future for yourself and your family. It’s based on your goals and dreams and includes tax planning, investments, and financial security.
● Financial planning advice is also about providing you with the information and advice you need to move in the direction you want to take. It puts you in control of your financial future.
● Financial planning advice brings peace of mind and financial security – you will have
everything in place to protect what you have now, and create more in the future.
Do I need financial planning advice?
● Let’s say you are reading this because you’re thinking about getting professional financial planning advice. That’s a great start. Because the fact is that no matter what your personal circumstances are now, you probably have some dream of where you’d like to be in the future. Or you may be in the fortunate position of having some money to invest. There are many
reasons why you might need professional financial planning advice including:
○ You’re changing jobs or just want to review your options under Super Choice.
○ You want to plan now for a comfortable retirement.
○ You have an inheritance, redundancy, or another lump sum to invest.
○ You want to make sure your family is protected if something happens to you or
your partner.
○ You are planning to buy an investment property.
○ You are single again after a long relationship, due to divorce or the death of your
○ You are starting your own business.
○ You are planning a major life change, such as marriage or retirement or moving
○ You want to make sure you leave something for your children or grandchildren.
What are the steps to getting financial planning advice?
The 6 steps to getting financial planning advice are :
○ Gathering your financial data: A financial planner will need to gather as much
information about your current financial situation as possible including details on
your income, debt level, and other commitments.
○ Identifying your goals: A financial planner will put your needs first so make sure
you clearly define your needs and goals at the first meeting.
○ Identifying any financial issues: A financial planner will tell you if there are any
deficiencies between where you are now financially and where you want to be.
○ Preparing your financial plan: This step involves your financial planner
identifying recommended investments and will address your attitude toward risk.
○ Implementing your financial plan: You will agree to take the financial plan,
possibly with some adjustments, and when you are ready to go ahead your
financial planner will show you how to put your financial plan into action.
○ Reviewing and revising your financial plan: For most people, their financial
plan is the start of a long-term relationship with their financial planner. To ensure
your plan stays up-to-date and relevant to the economic climate and your
changing lifestyle and goals, it should be reviewed regularly.
How much does financial planning cost?
● There is no set amount that a financial planner will charge. It depends on how complex your situation is and the level of service that the financial planner provides. Some financial planners will charge you directly for their services; others may be reimbursed by their employers or by the providers of products that you may invest in. Many will not charge you at all for the first meeting. Check their Financial Services Guide (FSG) for details. Your financial planner will prepare a Statement of Advice which will detail all fees and charges payable to the financial planner, both from commissions and fees.
As a general rule fees can include:
○ A flat dollar amount.
○ An hourly rate.
○ Commission on the amount you invest.
○ Some financial products have fees built in, and the payments may be
passed on from these to the financial planner.
○ You may be charged an initial fee for advice received and an ongoing fee for
additional advice. Some financial planners only use one fee basis, but many use a combination of the above. What questions should I consider before getting financial planning advice?
● Take an active role in making your financial plan and you’ll get maximum value from the experience. It may sound overly simple but you will need to know what it is you want from your financial plan! Before you meet with your financial planner, consider the questions below :
○ What are your lifestyle goals?
○ What insurance might you need?
○ Are you a member of a superannuation fund?
○ How much do you have to invest?
○ Would you consider borrowing money to invest?
○ What sort of return do you expect?
○ Can you live with the risk of losing some of your money?
○ What are your priorities?
What does my financial planner need to know about me?
● Expect to tell your financial planner a range of personal information to help them get an accurate picture of exactly where you are now and what you want from financial planning.
They have to understand your situation completely – so do not leave out any vital information.
To help put together your financial plan, a financial planner will use information such as
○ Your age.
○ Income – now and what you expect to be earning in the future.
○ How many dependents do you have?
○ Everyday expenses – how much it costs you to live now.
○ Possible future expenses – having a family, education, travel, house
○ How much tax do you pay now (and/or owe)?
○ How much do you have in assets (house, car, shares, valuables)?
○ How much do you owe in loans (mortgage, personal loans, credit card debt)?
○ Amount you have invested in superannuation or other investments.
○ Insurance – what are you covered for already, and how much would you
receive in case of a claim?
What will my financial plan contain?
● If your financial planner gives you personal advice, they must give you a written Statement of
Advice (SOA). This sets out :
○ The advice they’ve given you.
○ The information on which it’s based.
○ How many dependents do you have? How they get paid (including any
○ Any interests, associations, or relationships that could influence them.
● Personal advice is financial advice that takes into account your personal objectives, financial
situation, or needs. The information in an SOA should be presented clearly and concisely, with
enough detail for you to make an informed decision about whether to act on the advice.
● If your financial planner gives you general advice only, they do not have to give you an SOA.
However, they must warn you that the advice has been prepared without taking into account
your objectives, financial situation, or needs.
What happens once I have a financial plan?
● Don’t lose sight of the fact that it’s your money and the final decision is always yours. You can
ask for some changes to the financial plan if you want to, or you may decide not to go any
further. It is completely up to you.
● If you decide to go ahead your financial planner will discuss with you your next steps to put
the financial plan into action. There may be some actions you need to take (for example in making extra super contributions you may need to discuss your options with your employer first).
● Most people use the first financial plan as a starting point and change their financial plan from time to time, in line with changing goals and life stages – so your relationship with your
financial planner may be a long one!
What ongoing services do financial planners provide?
○ Reviewing progress in achieving your financial goals, and revising
strategies as required.
○ Investment portfolio valuations and reviews.
○ Information on new investment opportunities.
○ Ongoing consultations as required.
What questions do I ask my financial planner before we start?
○ Can I have a copy of your Financial Services Guide (FSG)? You can expect
to be given an FSG by an Australian Financial Services (AFS) license holder or its
authorized representative before you receive a financial service. The FSG
explains the nature of financial services being offered, the fees charged, and how
the person providing the service deals with customer complaints. If you are in
doubt you can check if they are licensed on the ASIC website a
○ What is your approach to financial planning? Some financial planners
specialize in certain types of planning – for example, retirement planning. So it’s
important to ask a few questions about their approach and find a financial
planner who is in tune with your lifestyle and wishes. Also, ask if the financial
planner will implement your financial plan themselves or refer you to others to do
○ How much do you typically charge? Your financial planner should be able to
give an estimate of possible costs based on the work you are asking for and your
options for paying for advice. Your financial planner must by law let you know all
costs to you, and all sources of potential income for them, from your financial
plan. For example, they may receive benefits from referring you to a particular
○ Will I receive a written plan? By law, if you proceed to get personal advice, your
financial planner must provide a written Statement Of Advice.
○ How often will you review the financial plan, and what will it cost me? Every
financial plan needs reviews, so find out what your financial planner will charge
you for ongoing reviews of your financial plan, and how often they believe it
should be done. As your goals and life change in the future, so should your
financial plan!
○ How do you resolve issues or disputes that arise? Ask at the beginning what
happens if you don’t want to accept your financial planner’s advice. Find out at
what stage you become obliged to make payment, and what happens if you want
to terminate their services at any time.
○ What credentials should my financial planner have? Your financial planner
must be licensed by the Australian Securities and Investments Commission
(ASIC) or be authorized to represent a license holder. He or she will have met
standards in terms of education, professional conduct, ongoing training,
compliance, and disclosure. They may be a member of a professional body, for
example, the Financial Planning Association of Australia (FPA). Your financial
planner should be covered by professional indemnity insurance.

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