What is financial planning? How can a financial planner help you?
Financial planning is all about making sure that your current and long-term financial needs are met in the best possible way.
There are three stages in the financial planning process - information gathering, analysis and recommendation, and implementation and review.
Stage 1: Information gathering
During your first meeting with your financial planner, they will ask you many questions to get to know you and to determine your financial goals, both long and short term. Your financial planner will consider your current situation - your assets and liabilities, expenses and income. Your financial planner will also determine your risk tolerance, that is, how you feel about risk.
There are no right or wrong answers. Your financial planner is there to learn all about you, so he or she can analyse your situation and recommend a course of action. If you have any questions or concerns, ask away. Your financial planner is there to assist you.
Stage 2: Analysis and recommendation
Your financial planner will analyse the information you have given them in detail. They may determine a single recommended strategy to help you achieve your financial goals or suggest some different options. Once your financial planner has determined this, they will meet with you again.
When you meet with your financial planner to discuss strategy, be prepared to ask lots of questions. Make sure you understand all aspects of the plan before signing anything. Your adviser will go through your plan with you in detail. If you are uncomfortable with any sections, discuss your concerns with your adviser. Depending on how you feel, you may choose to take the information away to read and consider, and then meet again with your adviser.
In addition, in conjunction with your adviser you may choose to modify some sections of the plan. Once you are happy with your plan of action, your financial planner will give you the appropriate forms to complete and sign.
Stage 3: Implementation and Review
Once you have agreed on your plan, it can then be implemented. This may involve opening a new account, consolidating your superannuation accounts and other assets, taking out insurance and more. Your adviser will assist you every step of the way to ensure that your financial plan is implemented with a minimum of fuss. Once your plan has been put in place, you will need to review your plan regularly with your adviser to ensure that it continues to meet your needs, which will change over time.