Financial Planning Explained



Financial Planning is a process – financial planning is not a product. It is the process and results of the development of strategies that are designed to help you to both manage what you have and design a way forward to what you would like to have for the future. A financial planner will use your financial plan to help you to build wealth, enjoy life and enjoy a level of financial security that meets your current and future needs.

It is a commonly held belief that a financial planner gives advice on how to invest your money and that having money to invest is mandatory. This could not be further from the truth. A financial planner’s role is to help you to achieve your financial goals in a manner that suits you. This means in a way that suits your current financial position, that takes you in the direction that you actually want to go, and vitally, take you in a manner which you feel comfortable with. By ensuring that these key aspects are properly covered with your financial plan, then you’ll have a financial plan that suits you very well now, and will be able to move with you into the future.

General or Personal Financial Advice?


There are two main types of advice that a Financial Planner can give you.

 

  1. General advice is advice that is given on a financial product. This advice does not take into account your personal financial situation and is only general, or generic in nature. Statements like “Superannuation is good for you” is general advice.
  2. Personal advice is financial advice that takes into consideration your personal needs and objectives, your current financial situation as well as your emotional requirements.

The Financial Planning Process


When a Financial Planner develops a Financial Plan for you, they will typically follow a process that has been generally adopted by most Financial Planners in Australia. There are six steps involved in this process, and ideally, these steps will lead both a Financial Planner and a client to a solid and successful result. The process is:

  1. Gather your financial information
  2. Identify your goals (both financial and person)
  3. Identify key areas and issues
  4. Prepare your financial plan (legally called a Statement of Advice)
  5. Implement any recommendations
  6. Review the plan as required

Once you reach the financial plan review stage, you are effectively doing "mini financial plans" on a regular basis to enusre that the chosen strategy is working as best as possible.  It is this fine tuning and constant attention that ensure the greatest possible value from your financial plan.

Our first meeting is complimentary and risk free, so why not book in now to find out how a Financial Spectrum Financial Planner can help you today.

For more information on Financial Planning, go to the Financial Spectrum Home Page.

Financial Spectrum is a Principal Member
of the Financial Planning Association
of Australia (FPA)