What is financial planning

by Chris C. Independent Financial Advisor

Most people don't really know what a financial planner does. That's understandable, unless you have one, how are you meant to know? Furthermore, it can be very confusing. This is because financial planning is a very broad field and some financial planners only provide advice (sell) life insurance, others just deal with investments and others just focus on budgeting and debt management advice and others still just focus on retirement planning advice. Others focus on younger "accumulators" and provide advice to them on how to reduce debt or increase assets. Others, like me, choose to specialise solely on planning for retirement advice. And others are "holistic" and cover everything.

To me, financial planning is the process where a financial planner and client get together to discuss the client's current financial situation. Together they explore what is important to the client and what their goals are. The planner then works out a strategy to meet those goals and presents the financial advice in a written document.

The actual steps involved may include:

The importance of Budgeting
How much you need in retirement
Superannuation salary sacrifice
Regular savings and investment plans
Tax effective structures
Government co-contribution and/or other government benefits
Centrelink aged pension maximisation strategies
Assessing a transition to retirement
Direct Shares
Debt reduction strategies

Sometimes the goal is unrealistic and can’t be met. This unfortunately is sometimes the reality, and when it occurs it is important for the financial adviser to be honest and upfront in advising the client of this. Only then can required adjustments be made.

Hopefully, if you didn't already know, you have a better understanding on what financial planners do. Most people will benefit from meeting with an independent financial planner. It is important though to find a financial planner who you trust and who is good. Far too often people google 'financial advisor near me' and base their choice in financial planner on who is closest to them. This is no basis to choose a financial planner. The relationship with your retirement adviser may well last decades; choose the right one. Cornish Wealth Management's website provides a list of financial planning reviews from our clients.

ASIC's moneysmart website provides some tips on working with a financial adviser. You can view them here. They give you a list of things to take to the first meeting, but crucially they also instruct you to "know what your adviser is offering". There is no point in you coming to see me if you are wanting advice on life insurances; it's not something I choose to do anymore. Come and see Cornish Wealth Management for retirement planning advice. Especially if you value "independent" advice.

You should also check anyone you meet with are actually a financial planner. You can do this on the Financial Adviser Register which is located here - https://moneysmart.gov.au/financial-advice/financial-advisers-register .