What to expect when you see a financial planner

Any personal advice you receive from a financial planner must be appropriate to your circumstances. While you do have the right not to tell your financial planner personal information, if you don’t, the advice you receive may not be appropriate to your needs and your financial situation. When seeing a financial planner, The Financial Planning Association (FPA) has indicated that you should expect the following six step process.

Six steps of the financial planning process

1) Gathering financial data - A financial planner will need to gather as much information about your current financial situation as possible including details on your income, debt level and other commitments

2) Identifying your goals - A financial planner will put your needs first so make sure you clearly define your needs and goals at the first meeting.

3) Identifying any financial issues - A Financial planner will tell you if there are any deficiencies between where you are and where you are now financially and where you want to be.

4) Preparing your financial plan - This step involves your financial planner identifying recommended investments and will address your attitude to risk

5) Implementing your financial plan - You may agree to take the plan with some adjustments, and when you are ready to go ahead your planner will show you how to put your plan into action.

6) Reviewing and revising your plan - For most people their financial plan is the start of a long term relationship with their financial planner. To ensure your plan stays up-to-date and relevant to the economic climate and your changing lifestyle and goals, you should:

· Review it at least once a year.

· Keep an eye on your investments

· If major changes occur in your circumstances ask your adviser to review the advice.

· If any changes are recommended, ensure you get a written explanation and read it carefully before making any changes.

What your financial planner needs to know about you.

Your financial planner will ask you a range of personal questions to help them create an accurate understanding of your current position and where you want to be in the future.

A financial planner needs specific information to understand your situation to help put together an accurate plan.

• Your age
• Income- now and what you expect to be earning in the future
• How many dependent you have
• Everyday expenses - how much it costs you to live now
• Possible future expenses – having a family, education, travel, house renovations
• How much tax you pay now (and/or owe)
• How much you have in assets (house, car, valuables, shares)
• How much you owe in loans (mortgage, personal loans, credit card debt)
• Amount you have invested in superannuation or other investments
• Insurance- what you are covered for already, and how much you would receive in case of a claim?

The Financial Planning Association has noted some commonly asked questions when making a plan

Tax

• What is the most tax effective way for me to save?
• What is the most I can contribute to super, so that it is still tax effective?

Investments

• Should be saving via superannuation, non-super, or should I pay off the house?
• How should I invest my savings? What proportion should I invest in shares? Fixed interest, cash or property?
• How do I decide between Managed Investments and Direct Investments?
• Which fund managers are best for each type of investment?
• Is margin lending or gearing the right strategy for me?

Insurance

• What insurance do I need to protect my family? Death? Total and Permanent Disability? Salary continuance? Trauma? Health?
• Should I organise this through my super, or outside my super?

Retirement

• When should I start seriously planning for my retirement?
• How much do I need to live comfortably in retirement?
• How much should I be saving to make sure I have enough to retire on?
• I’d like to retire soon. What are the most tax-effective ways to take my money?
• Is there a better super fund than my current employer fund?
• How can I maximise my Centerlink entitlements?

Questions to think about.

To get the greatest value out of a financial plan is to be an active participant in its creation. After all it is a reflection of what you want to achieve. Before you meet with your financial planner, consider the following questions:

• What are your lifestyle goals?
• What insurance might you need?
• Are you a member of a superannuation fund?
• How much do you have to invest?
• Would you consider borrowing money to invest?
• What sort or return do you expect?
• Can you live with the risk of losing some of your money?
• What are your priorities?