WHAT IS A FINANCIAL PLAN?
Whether you go to a professional financial planner or do it yourself, you’re going to need a plan. In its brochure, “Don’t kiss your money goodbye”, the Australian Investments and Securities Commission (ASIC) says that a good financial plan should:
- summarize your financial position
- list your goals
- explain how you will reach those goals
- show how carefully chosen investments mesh together as working parts of your overall strategy
- disclose and explain any risks and how they can be overcome
- state all the costs
- reveal the commissions your adviser might receive from the recommended investments.
Visit the Australian Securities and Investments Commission (ASIC), for more information about financial advice and planning.
What is financial planning advice?
Financial planning advice helps you plan and manage your money to work towards making your dreams and goals become a reality.
Whatever your situation, there are 7 key building blocks (sometimes called ‘strategies’) that we can use, in combination, to help make the most of your money.
What to expect when you see a financial planner – the 7 step process
- The law requires that any personal advice you receive from us must be appropriate to your circumstances. While you have the right not to tell us personal information, if you don’t, the advice you receive may not be appropriate to your needs and your financial situation. When we meet we will take you through a 7-step process:
- It is important to remember that you are in control and can decide whether to stop, change or continue at any stage of the process.
What information will you need when you meet with us?
At our first meeting, we will ask you about you – about where you are now, about your expectations, about how youwould like to live your life.
Then we will conduct something called ‘fact finding’ – we will ask you about your personal circumstances and help you to determine your attitude towards risk. Your attitude to risk means whether you are conservative in the way you invest, aggressive or somewhere in between.
We will ask you for detailed personal information; we need it to put together your financial plan. We will ask things like your:
- age
- current personal income
- family income
- future income (inheritances included)
- day-to-day expenses
- your family circumstances (number and health of dependants, dependants from previous relationships etc)
- future expenses
- assets and liabilities
- tax paid and tax owed
- super and insurance situation
- current investments
- state of health.
You will also need to have considered your goals and current financial position. We will ask you things like:
- when you want to retire
- how you want to educate your children
- whether a second home, like a holiday house, is important to you
- do you have dependents you need to provide for if you are unable to work or if the unforeseen happens
- whether you have an up-to-date Will
- whether you are expecting any large expenses.
What will you receive?
During the financial planning process we will give you:
- A written Statement of Advice that outlines the relevant information that you have provided, the advice you have been given and why it is suitable for you (along with how we get paid and any other benefits we may receive).
- A Product Disclosure Statement – if we recommend a financial product. The Product Disclosure Statement gives you information about the product features, fees that apply, any adviser commission, benefits and risks of investing and what to do if you have a complaint.
- Remember, it’s important to keep these documents in case you need them in the future.