How does financial planning work?

Your financial planner uses a six step process that helps you take a 'big picture' look at where you are and where you want to be. Using this process, they help you work out what you need to do now and in the future to reach your goals.

Step 1. Gathering your financial data – such as details on your income, debt level, commitments etc

Step 2. Identifying your financial goals

Step 3. Identifying any financial issues or deficiencies between where you are now financially and where you want to be

Step 4. Preparing your financial plan, which will identify recommended investments and will address your attitude to risk

Step 5. Implementing your financial plan

Step 6. Reviewing and revising your plan to ensure it stays up-to-date and relevant.

How can a financial planner help you?

Your financial advisor can assist you in any of the following areas:

• How to grow and build your wealth through a savings plan, budgeting or investment strategy
• Choosing investments that meet your financial goals
• Superannuation
• Insurance to protect you, your family and assets
• Strategies to reduce tax either through superannuation, salary sacrificing, salary packaging or investments
• Retirement planning and having an income stream in retirement
• Estate planning

How to select a financial planner

When you seek financial advice, it is important to know that your financial planner has the appropriate skills and experience and that the dealer group he or she is associated with has the ability to deliver the ongoing services you require.

The following questions may be useful in helping you to assess the merits of a financial planner:

1. Do they have a Financial Services Guide?

All financial planners are legally required to produce a Financial Services Guide (FSG). It gives you an easy to understand explanation of their fee structure and the services they offer.

2. Are they, or their company, licensed by the Australian Securities and Investments Commission (ASIC)?

An authorised financial planner must meet the knowledge, skills and integrity standards required by ASIC.

3. What are their qualifications and experience?

Check that the financial planner has appropriate qualifications, for example a Diploma of Financial Planning. Ask how long they have been a financial advisor.

4. Are they a member of a professional association?

We strongly advise that any financial planner you use is a member of the Australian Financial Planning Association (FPA). The FPA is the professional body for financial planners in Australia. Members must adhere to the Codes of Ethics and strict operating guidelines outlined by the FPA to protect your rights.

5. What financial services do they offer?

Does the financial planner only offer investment advice, or do they offer a holistic approach to financial planning, including insurance, tax, estate planning and superannuation? Do they have ongoing finanacial planning review services? Do they offer investment administration services?

6. How are financial planners paid for their services?

Find out if the financial advisor operates on a flat fee, brokerage or commission basis. Ask them to explain all upfront, ongoing and exit fees which might be payable by you (directly or indirectly).

If you would like more information on how financial planning can help you achieve your financial goals, speak to one of the financial planners at Intellichoice today on 1300 55 10 45.