What is Financial Planning

Financial planning is the process of meeting your life’s goals through the proper management of your finances. Your life’s goals may include buying a home, saving for your children’s education and planning for retirement.

Generally, developing a financial plan involves:

  • Accessing your personal circumstances, risk tolerance and financial needs.
  • Working out what you want to achieve, how you might achieve it and understanding any problems you might encounter along the way
  • Investigating and deciding on the best way to make your money work for you

Benefits of financial advice

Professional financial planning advice:

  • Gives direction and meaning to your financial decisions
  • Helps protect and build your income or investments your income or investments
  • Assists you to plan major changes in your personal circumstances e.g. retirement
  • Allows you to see your financial decisions in the big picture
  • Provides a sense of security and peace of mind that you are on track with your financial goals

Choosing an FPA member as your financial planner

Australians who choose an FPA member as their financial planner can feel secure that they are professionals who put their client’s interest first. FPA members are bound by a code of ethics and rules of professional conduct higher than those required by law, and commit to achieve required levels of continuing professional development (CPD).

FPA practitioner members are qualified professionals who can help you decide on all your financial needs. FPA professional standards of conduct are enforceable, and recognised by external bodies such as regulators and the courts.

FPA Complaints & Disciplinary Scheme

All FPA members are subject to the FPA’s complaints and disciplinary scheme. FPA regulations require that any alleged breach of the FPA’s professional standards be investigated, and if warranted, referred to the FPA’s Disciplinary Committees. Serious breaches of the professional standards may result in heavy penalties, including censure, fines and – in extreme cases – suspension of FPA membership.

Financial Industry Complaint Service

All Principal members must be members of an approved external complaint resolution scheme, the Financial Industry Complaints Service (FICS). Principal members and the activities of all their Authorised Representatives (both FPA members and non-members) are subject to the FICS. Clients may lodge a complaint for financial loss with FICS as a result of a breach of the FPA’s professional standards.

What to expect from a good financial plan

A good financial plan should: Once your financial plan is in place you should:
  • Outline your financial position and needs
  • Set out your goals
  • Explain the strategy to achieve them
  • Discuss risks and how to deal with them
  • Recommend investments to manage your money
  • Show how each investment will get you to your goals
  • Set out all costs clearly
  • Tell you about commissions and benefits that your financial planner will receive
  • 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 plan
  • If any changes are recommended, ensure you get a written explanation and read it carefully before making any changes.

*This information has been provided by the FPA.

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