+ Do I need financial advice?

If you could achieve your financial goals by simply putting money away in the bank, you wouldn’t need a financial plan. Unfortunately, life is a little more complex – it’s hard to understand the intricacies of investment, taxation and ever-changing regulations, so you need professional help.

Yet many of us resist seeking advice, as if our financial future weren’t just as important as our health or our children’s education. We often decide to manage our financial affairs ourselves, or leave it to someone we know, perhaps an accountant or a solicitor, which is a bit like buying vegetables at the butchers. Financial planning is a specialist profession and you should make sure that you’re getting advice from a properly qualified person.

A financial planner will help you reach your goals; even if retirement may seem a lifetime away, the sooner you start planning the more likelihood you’ll have to achieve financial independence and peace of mind.

+ What is the CERTIFIED FINANCIAL PLANNER designation?

A CERTIFIED FINANCIAL PLANNER® professional has achieved the highest financial planning qualification worldwide. There are about 5,500 CERTIFIED FINANCIAL PLANNER® professionals around Australia.

+ Who can call themselves a financial planner?

Entrusting your finances to a professional is an important decision. One of the factors which you need to take into account is the fact that currently, the law allows a wide range of individuals to call themselves a ‘financial planner’ and provide financial advice in some shape or form. Those who can call themselves a ‘financial planner’ includes the following:

• product sales representatives
• life insurance brokers
• stock brokers
• general insurance brokers
• mortgage brokers
• real estate agents
• financial information service (FIS) officers
• financial counsellors
• bank tellers
• accountants
• lawyers
• paraplanners
• business development managers (BDMs)
• client service representatives
• tax agents
• property developers
• auditors (especially those who deal with SMSFs)

Be wary of people who call themselves financial planners, but are not sufficiently professional or even qualified. Alarm bells should start ringing if you come across any of the following signs:

• Doesn’t have a professional license, qualifications or industry membership
• Doesn’t take time to learn about your individual circumstances, needs and goals
• Is more interested in selling you a product than developing a strategy for you
• Promises you the world (ie high returns and low risk) and tells you not to worry
• Avoids questions and withholds information
• The fees and charges are not clear or appear excessive

+ What questions should I ask at an initial meeting?

The introductory meeting is your opportunity to make sure that you feel comfortable with the financial planner’s professional credentials, and that you get on well.

A sure sign of a good financial planner is that they don’t rush you, they carefully listen to you and clearly explain where they can add value and where they can’t.

+ What sort of advice do I need?

The advice you seek can be holistic (which takes into account your full financial situation, needs and goals) or scaled (where you only seek advice for particular purposes).

Scaled advice means that you could see a financial planner for a particular purpose that is most relevant to you at any point in time – without the need to go through a holistic process that takes your full financial situation into account.

While scaled advice can make financial planning more affordable, it’s important to not lose sight of the bigger picture. This is where a professional financial planner can help you to take a step back and review your total financial situation.

+ What do I do if I am concerned about market ups and downs?

Global markets are shifting constantly, and volatility has become the norm. Investors can get understandably nervous and concerned about the fall in the value of their investments. When emotions take charge, it’s important to avoid falling into some of the traps that appear when markets are unpredictable.

Understanding what’s happening and how these events can impact you will help you to make confident decisions about your financial future.

Your financial planner will help you to take a step back and look at the bigger picture and make the best decisions for your financial future.

+ How much does financial planning cost?

By law all financial planners must disclose all forms of payment and fees. The cost to you will depend on the complexity of your financial situation and plan.

It starts with an initial fee to cover identifying your needs, developing a strategy and implementing the recommendations. There could also be administration and ongoing service fees for regular reviews of your plan to ensure it meets your changing circumstances.

+ Do you receive ‘kick backs’ from product providers?

Once upon a time, financial planners received fees called trail commissions that were built in to the product. Andrea Jenkins of Jenbury Financial has never sold a client an investment that included a trail commission. Andrea will negotiate an appropriate fee with you for the initial and ongoing advice that you require and you can decide whether to pay the fee from your personal bank account or from your investment (where possible).