Getting a sound advice from a financial planner or adviser is the first leap towards achieving financial objectives, the first key step in financial planning. That's why it's important to find a financial planner with the experience and expertise who can help with the right financial options.
Along with seeking the support of a professional licensed financial planner, there are aspects that potential clients need to take responsibility for.
Client’s Responsibilities
1. Understand what you want to achieve. This defines financial objectives, including where you want to go, things you want to do, where you want to be and the period of time in years.
2. Develop a financial plan of how your goals will be achieved. This is the “how to get there” thing – understanding your current situation, identifying opportunities and developing solutions to get there.
3. Choose the products that will support your plan. This shows the way to put decisions into action, and help to make it happen.
4. Implement the plan. Once the plan has been presented by the financial planner and you agree with the planner’s recommendation, the plan or advice will be acted on.
5. Review and monitor. The financial planner or adviser can offer client an ongoing support. (This will have to be agreed upon by both parties.)
After choosing a financial planner or adviser, you become a client, and a financial planning advice process ensues designed to identify savings and investment strategies appropriate for your specific financial needs and objectives.
The Financial Planning Advice Process
1. First Meeting with the Financial Planner
This initial meeting is free of charge. The financial planner uses this first meeting to gather facts about you – your income, existing investments, your future lifestyle needs and objectives. The availability of the following information will greatly help the planner work for you:
- details of your income, expenses, assets and liabilities
- details of your financial commitments, including mortgage, car loan and credit cards
- details of your savings accounts, superannuation and any investments applicable.
Keep in mind that it’s about your life and money, and therefore, you are the final decision-maker. The next steps are discussed and the cost of the financial plan laid out.
2. Develop the Financial Plan
After identifying your needs, your financial planner will make an analysis of your personal situation and present the investment and insurance recommendations in a written financial plan. This is known as a Statement of Advice.
Financial Plan Considerations
- Present financial circumstances
- Assets and Income needs
- Current government regulations
- Economic, tax and social security issues
- Insurances, if applicable
- Lifestyle choices
As a client, you need to clearly and thoroughly understand the financial planner’s recommendations. If there’s anything unclear, the planner is asked to explain.
3. Follow-up Meeting with the Financial Planner
When you are ready to put your financial plan into action, the financial planner can assist with the process of implementing insurance and investment recommendations, including the completion of application forms to establish these insurance policies and/or investments.
The planner helps develop ways to make the plan work effectively. It is important to keep in mind that you are in no obligation to follow their advice or recommendations. And more vital is to review your financial situation, especially when circumstances change – for example, you change jobs, get married, have a baby, or get divorced.
4. Keep Financial Plan Up to Date
Investing is one of the best ways to help reach retirement objectives, but it’s only a part of life’s journey. Circumstances can change that can affect investments and other plans over time. An ongoing service for client is arranged by the financial planner which includes the following:
- Regular contact and ongoing support
- Market updates and information on financial solutions
- Updates on government legislation changes, taxation and the economic environment
- Useful advice on budgeting, debt management, estate planning and insurance issues
- Annual review meeting to revisit objectives and discuss any potential changes.
In financial planning, just as the client has a responsibility to provide the right information, so do the financial planners in providing a sound and consistent advice to their clients.
They consider all financial needs and objectives in helping develop a viable financial plan. They also ensure a high level integrity of advice through up-to-date professional standards and use of technological and management resources to offer a competent advice.
Interested readers may want to check these related articles: Financial Planning: Taking Control of Money and Life, How to Manage Money Wisely, How to Make Money Work, Tips and Ideas for Wealth Creation and How to Avoid Financial Disaster.
Source:
Commonwealth Bank of Australia
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