The Financial Planning Process
Financial planning can often be a complex task to tackle and without the help of an experienced financial planner it can be almost too difficult to set out a financial planning structure on your own.
This is where a financial planning professional can help you set out a financial plan to help meet your goals for the short, medium and long term.
Financial planning is imperative to your financial future and as part of the financial planning process there are a number of steps taken to ensure your goals are worked towards and met.
There are in essence six steps to a financial planning strategy and we have highlighted these steps below for your reference, these six steps to financial planning are:
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Financial planning step one involves gathering information such as financial & personal |
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Financial planning step two is all about identifying your goals |
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Financial planning step three is understanding where you are now financially and where you want to be in the short, medium and long term |
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Financial planning step four involves the preparation of your financial planning strategy which note recommended investments based on attitude to risk |
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Financial planning step five is where your financial plan is implemented based on all of the above and your agreement on the strategies recommended |
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Financial Planning step six involves a regular revisit of your financial plan and in most cases this occurs on a yearly basis or earlier if requested or required |
There are other elements of financial planning which form part of the six stage process of financial planning and we have highlighted some of the key elements which help make up a financial planning strategy.
Please use the links below to obtain more information about financial planning:
Financial Services Guide FSG for Financial Planning)
The FSG or financial services guide is a document which must be provided at the very beginning of the financial planning process as it outlines the information you need to know about your financial planner.
The FSG must provide you with the below information in relation to financial planning and your financial planner:
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How the financial planner gets paid for the financial planning they will perform |
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Whom your financial planner works for |
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What escalation process’ are in place if you’re not satisfied with your financial planner during the financial planning process |
We suggest that if you are not provide with the FSG from your financial planner then you should not proceed with financial planning with that individual as all financial planners must provide the FSG as part of the financial planning process.
To find out more about the FSG or financial planning in general please contact us.
Financial Planning Client Questionnaire
As part of the financial planning process you will be guided through a financial planning client questionnaire.
This is a tool used by your financial planner to assess your financial position and personal goals.
In essence this document is a fact finder and provides the basis for your financial planner in formulating the most appropriate financial planning strategy for your needs.
When your financial planner sits down and goes through this questionnaire it is important that you provide as much information as possible so your financial planning strategy reflects your unique needs as closely as possible.
The client questionnaire for financial planning is broken up into the following sections:
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Your current financial position and personal details |
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The financial planning objectives that you have |
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The income of you and or your family unit and also your expenses |
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What assets you have along with your liabilities and any existing policies you have in place |
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Estate planning details (if applicable – for information on estate planning please follow this link) |
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Your risk profile as this will determine the advice provided within the financial planning strategy |
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An agreement for the financial planner to create a statement of advice (SOA) for financial planning purposes |
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An authority for your financial planner to obtain information from third parties in relation to preparing the financial planning strategy |
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An authorisation to limit financial planning advice |
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A ‘Duty of Care & Privacy Statement’ |
Bear in mind that depending on your financial planning needs that some of these sections within the financial planning client questionnaire will not need to be covered and your financial planner will be able to guide you through when discussing your financial planning strategy.
Financial Planning Statement of Advice
A statement of advice is part of the financial planning process and in essence outlines the financial planning strategy based on the client questionnaire and interview held with your financial planning professional.
Let’s take a look at what is included within a SOA as part of the financial planning process:
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A detailed outline of your financial planning objectives |
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Financial planning strategies recommended by your financial planning professional including alternatives |
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A final strategy recommendation by your financial planning professional who has considered your goals and risk profile |
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A detailed financial planning analysis and recommendation of specific products within the financial planning strategy provided |
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A PDS will also be provided (product disclosure statement/s) for each of the products recommend within the financial planning strategy |
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If you have an existing product or policy and there is to be a change then your financial planning professional will also highlight the consequences of that change and detail these for you |
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A breakdown of the full costs that the financial planning professional will charge for their services and also what commissions the financial planning professional will receive |
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Finally there is an authority to proceed form which you need to sign for the financial planning strategy to be put in place |
Financial Planning can be complex and time consuming and this is where a financial planning professional comes into play by helping you through the financial planning process and being there to answer any questions.
A financial planning professional will also stay in touch with you and review your financial planning strategy on a regular basis.
Financial Planning Implementation
The financial planning professional will assist you in completing all the forms and documents required to move forward with your financial planning strategy and will then arrange everything in order to ensure the financial planning strategy is implemented without delay.
As the financial planning strategy is put in place there may be some further information required and your financial planning professional will be in touch to obtain this information and use it as required to implement your financial planning strategy.
Financial Planning Reviews
Your financial planning strategy will need to be reviewed on a regular basis and this is normally done with your financial planning professional on a yearly basis.
By reviewing your financial planning strategy you ensure that you are tracking towards the goals originally set out in your initial financial planning strategy, this may mean that you move some of your investments to another fund or invest in different markets.
How can we help you with Financial Planning?
We can help you with financial planning by providing you with access to financial planning professionals across Australia who are all qualified in financial planning.
Just contact us and allow us to arrange a financial planning appointment.
Other useful links within our site: -
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Useful Sites as a point of reference: -
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