As a profession, financial planning has been around for several decades. Even so, the notion of what financial planning actually does is not widely understood. For example, if I’m at a barbecue and the person I’m speaking with learns I am a financial planner, the first thing they will often say to me is, ‘What should I be investing in?’ And whilst investments are an important part of the financial planning puzzle, true financial planning is not about offering the latest hot investment tip.
Effective financial planning takes stock of your current situation and your lifetime goals for your wealth – and designs a path for you to get there. In doing so, there is much more to consider than just what investments you choose.
A financial planner can help you to:
- Clearly define what you want to achieve in your life
- Review your current financial circumstances and identify strengths and weaknesses
- Chart a course for you to get from where you are now to where you want to be
- Regularly assess how you’re faring, to keep you on track
- Adjust your financial strategy in light of any threats or opportunities that may arise
- Make the most of strategies and structures that can hasten the growth of your wealth and income, and reduce expenses (including tax)
- and much more.
Clearly identifying what your goals are and why they’re important to you is vitally important. This insight can provide the ‘fuel’ to motivate you to implement what’s been recommended for you, and to stay the course over the long term. After all, a great plan that’s not implemented is useless!
How is financial planning regulated?
In Australia, the financial planning sector is highly regulated, and financial planners must meet minimum educational standards set by the Australian Securities and Investments Commission (ASIC). They must also operate under an approved licence, issued by ASIC.
Depending upon the scope of their licence, financial planners can advise in areas such as wealth accumulation, wealth protection, business insurance, superannuation, social security, managing wealth transfer between generations, direct equities (shares) and more.
Get ahead sooner
Good quality financial planning will identify strategies that can significantly enhance your financial wellbeing and success. Having a financial plan created for you that addresses your unique situation and life goals is a great way to get your financial house in order and keep it that way forever.
Jason Petersen is a CERTIFIED FINANCIAL PLANNER® professional and Head of Wealth Management at 5 Wealth Management Pty Ltd, AFSL 314889, based in Rhodes.
Contact us today to discuss how we can help you to organise and improve your financial circumstances, so that you can achieve your goals sooner.