Financial Planning is the process of meeting your life’s goals through the proper management of your finances. Your life’s goals may include buying a home, investing for the future, saving for your children’s education and planning for retirement. Each individual has a different definition of what they want to achieve and your financial planning arrangements should be reflective of this.
A Financial Planner can provide advice on how to best structure and manage your affairs in order to achieve your goals. They can provide advice on many things, such as:
• Money Management
• Wealth Planning
• Managing debt and risk
• Buying your own home
• Personal Insurance, such as life insurance and income protection
• Redundancy and rollover advice
• Investment Portfolio planning and management
• Shares, Property and Managed Funds
• Retirement Planning
• Estate Planning
Note: Not all financial planners provide advice on all areas – so make sure you ask what areas they cover before obtaining advice.
Financial Planners work through a six-step process with you to determine what your present situation is and what your needs and objectives are in the short, medium and long-term future. These steps are as follows:
• Step 1 – Gathering the data and information
• Step 2 – Identifying your goals
• Step 3 – Identifying financial issues
• Step 4 – Prepare your Statement of Advice including any recommended strategies
• Step 5 – Implement the recommended strategies
• Step 6 – Review the recommendations
A financial plan is like a ‘road map’ for your money. It firstly needs to clarify where you are today, then where you want to go and lastly what you need to do to get to where you want. The complexity of your situation will determine the level of content and detail required within the plan.
Ask friends and family if they know of a good licensed planner or approach some in your local area. Contact the Planner to find out about their services, the types of clients they regularly deal with, what experience they have and what the costs will be.
By law, prior to providing advice all Financial Planners must provide prospective clients with a copy of their “Financial Services Guide” or “Advisory Services Guide”. This should explain how they are licensed, what their fees and charges are, what kind of products and services they provide, who they may be affiliated with and how any complaints will be handled.
There is no fixed price or method of charging used by planners and it will vary depending on the type of services you require. Some planners charge a commission on the amount of funds invested and no up-front fee, these commissions usually range from 1% to 2.5% of the funds invested.
Others charge an hourly or fixed fee and rebate some or all commissions to you. These fees usually range between $150 and $400 per hour. The Planner may also have a fixed price for particular services, such as writing a financial plan for you.
Again, the cost will depend on the level of advice you require and should be discussed and agreed upon before any advice is provided.
Any information that is relevant to your personal financial situation. A Planner will need to know details such as:
• Personal details
• Goals, objectives and concerns
• Income and expenses
• Assets and liabilities
• Current insurance details
• Existing investments and retirement planning
You can use this Money Planner to assess your current financial situation.