Are Financial Planners Useful at All?

Are financial planners useful at all? This question has been asked by many people who are seeking financial advice.

The answer is not straightforward, but it's crucial to understand if you want to make informed decisions about your money.

So, let's dive into the world of financial planning and try to find out if it's worth considering.

In short, yes, financial planners can be useful in Australia. They can help you identify your financial goals, create a plan to achieve them and monitor your progress.

Additionally, they can provide you with guidance on investments, insurance, tax, and retirement planning. However, not all financial planners are created equal, so it's essential to do your due diligence before selecting one.

If you're still unsure about whether you need a financial planner, keep reading.

We'll explore the pros and cons of working with a financial planner and help you decide whether it's worth the investment. So, let's get started and find out if a financial planner is right for you.

What are Financial Planners?

Professionals known as financial planners assist individuals in managing their personal finances by offering guidance on a variety of financial topics, including investments, insurance, taxes, and planning for retirement, amongst others. 

They assist customers in developing a financial strategy that takes into account their aims and ambitions, and they offer continuing support and direction to guarantee that the strategy is carried out as intended.

The Australian Securities and Investments Commission (ASIC) is responsible for regulating the financial planning industry in Australia, and financial planners are required to achieve certain educational and professional criteria. 

They are also required to abide by a code of ethics and conduct, which requires them to operate in a manner that is considered to be in the best interest of their customers and to disclose any potential conflicts of interest.

The Role of Financial Planners 

The work of financial planners significantly impacts the financial landscape of Australia.

They do this by offering guidance on a variety of topics related to finances, which helps individuals improve their financial management and work towards reaching their monetary objectives.

The following are some examples of the services that financial planners provide:

• Developing a financial strategy for the client that takes into account their priorities and aims

• Providing advice on financial matters, including retirement planning, taxes, investments, and insurance

• Giving continuous support and direction in order to guarantee that the financial strategy is carried out as intended

• Maintaining a close eye on how well investments are doing and making adjustments as required

• Providing clients with education on financial topics and assisting them in making decisions based on that education

Why Get Help with Your Finances?

You have arrived at this moment in your life, which marks a turning point or a substantial change in your circumstances, and it is time to make a crucial decision regarding your finances.

You may just be one or two years away from retiring, but you may already be concerned about how you will fund your golden years. Will you still be able to afford to take those once-a-year trips to a foreign country? Will you be able to keep going to that charming little Italian restaurant and continue to enjoy your meals there? Or, perhaps you have been running a business for a number of years, during which time you have had to make a number of concessions, and you have just come to the conclusion that there's got to be so much to life than working seven days a week.

It's possible that you put all of your retirement savings into high-risk investment strategies that performed very well while the economy was booming and the stock market was soaring.

But, because of a market decline, you are afraid that you have lost everything. Or perhaps, after a handful of good years that turned into a number of bad years, your relationship with your partner has finally come to an end after a number of years of struggle. 

Maybe, even more tragically, after a number of wonderful years together, the person you love has passed away. This cherished person, with whom you had intended to share a future and who also took care of the finances, is no longer in your life. You had hoped to spend your golden years with. Yet, at this point in time, you are interested in exploring the potential for achieving the life you'd like to have. You start to wonder to yourself, "Where to now," as well as "Do I have enough?"

You can't help but think back to the most recent dinner you shared with those outgoing and charming pals, and how they discussed their financial adviser. They brag about this individual by saying things like, "He is such a wonderful fellow," as though he is some kind of a financial sage. 

They recommend to you that you talk to him as they take another sip of their wine. "You should perhaps chat with him," they say to you.

They had grabbed his business card out of their pocket before you even had a chance to realise what was happening, just as swiftly as a magician would pull rabbits out of a hat. You might be wondering, "What could I possibly gain from getting financial advice?" Where do I find the value in this?

Having a healthy amount of scepticism towards the financial planning sector is not difficult. The findings of the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Sector were made public in 2018, and they detailed instances of unethical behaviour inside the industry. The Commission received over 10,000 submissions, with 61% of them dealing to banking, 12% to superannuation, and 9% to financial advice, respectively.

Since the Royal Commission, many banks that hold financial licences (an ASIC requirement to be called a financial adviser is to start operating under a holder of a financial services licence) have made the decision to withdraw from the wealth management industry and instead concentrate on traditional banking services. The majority of the banks have already implemented this modification, and the remaining banks all have plans to implement it as well.

Since the Commission, minimum education standards have been established. New entrants into the field of financial advice are required to hold a degree relevant to the field of financial advice and are obligated to finish a certain number of specialised years before they are allowed to set foot in front of a customer. 

It has been stipulated that current advisors have till 2024 to improve their skill sets and advance their education to the level of that of a degree. A significant number of consultants already have advanced degrees in fields such as economics, business, law, and even psychology.

In addition, advisers are required to pass a test to demonstrate that they are compliant with ethical norms. It is mandatory for financial advisers to be members of a professional association, like the Association of Financial Advisers, the SMSF Association, or the Financial Planning Association. 

In addition, in 2019, a Financial Planners and Advisers Code of Ethics was enacted in order to offer an ethical code that would demonstrate the minimum standard for advisers to comply with the needs of their customers. This code is intended to ensure that advisers are acting in their customers' best interests.

The Pros and Cons of Hiring a Financial Planner

Employing a financial planner comes with a range of benefits as well as potential drawbacks. There are several advantages to working with a financial planner, some of which are as follows:

• Access to the counsel and skills of trained professionals

• Personalised financial planning that takes into account and works towards achieving the client's specific goals and ambitions

• Continuous help and direction in order to guarantee that the financial plan is executed correctly.

• Advice and assistance with difficult aspects of personal finance, including tax planning and estate planning

However, engaging a financial planner is not without its drawbacks, such as the following examples:

• Cost is an issue, and the fees charged by financial planners can range widely depending on the services they provide and the level of competence they possess.

• Possibility for conflicts of interest to arise Some financial planners are paid commissions or other incentives for suggesting particular financial products, which might give rise to the possibility of a conflict of interest.

• Loss of control: Using the services of a financial planner necessitates relinquishing some control over one's own financial situation, which may be challenging for certain kinds of people.

The Benefits of Financial Planning

Let's explore the benefits of financial planning.

1. Financial Security

The biggest advantage of having a financial plan is increased peace of mind regarding one's finances. You can identify potential financial hazards with the help of a financial plan and then take action to reduce or eliminate those risks. In addition, it guarantees that you will have sufficient savings to meet unforeseen costs and unexpected events.

2. Achieving Your Goals

Creating and working towards your financial objectives with the assistance of a financial plan is beneficial. A financial plan can assist you in reaching your objectives, whether they be to save money for a down payment on a house, pay off debt, or save money for retirement.

3. Investment Planning

Investment planning is an integral aspect of financial planning. Your investment objectives, level of comfort with risk, and anticipated time horizon should all figure into your financial plan. It assists in forming a diverse investment portfolio that is in accordance with your objectives.

4. Tax Planning

Planning for one's taxes is another essential component of financial planning. A financial plan takes into account your current tax situation and assists you in reducing the amount of tax that you owe as a result. It guarantees that you are making the most of all the tax deductions and credits available to you.

5. Retirement Planning

The preparation of a retirement strategy is among the most important components of financial planning. You can determine how much money you need to save for retirement and the most effective way to save it with the help of a financial plan. Additionally, it assures that you are on the right path to achieving your retirement objectives.

Benefits of Working with a Financial Planner

Working with a financial planner in Australia can provide a number of benefits, including the following:

1. Personalised Financial Advice

A financial planner is someone who can give you individualised guidance and solutions that are tailored to your particular financial status, objectives, and level of comfort with risk. They can assist you in developing an individualised financial strategy that considers your specific requirements and preferences.

2. Objective and Unbiased Advice

Financial planners are required by law to provide impartial and unbiased advice in the client's best interest. This is in contrast to some financial consultants who work on a commission basis or market-specific products. They are obligated to perform their duties in a trustworthy manner and to steer clear of any potential conflicts of interest.

3. Comprehensive Financial Planning

A financial planner can provide comprehensive financial planning services that cover all elements of your money, such as budgeting, investing, saving, retirement planning, estate planning, and risk management. These services can be covered under the umbrella of comprehensive financial planning. They are also able to guide you through complicated financial issues such as tax planning, divorce, and inheritances.

4. Financial Education and Empowerment

Working with a financial planner can also help you become more aware and secure about your financial situation, which is a major benefit. They can instruct you on the fundamentals of financial literacy, such as how to create a budget, manage debt, and invest money, and they can assist you in making educated choices regarding your financial situation. They can also serve as a source of motivation to help you stay on track and accomplish your monetary objectives.

5. Peace of Mind

Last but not least, working with a financial planner can provide you with the sense of security that comes from knowing that you have a trained expert on your side who is looking out for your best interests. You are able to have confidence in the decisions you make regarding your finances and be ready for any unforeseen events or changes that may occur in your life.

More Than Anything Else, Financial Planning Is About Knowing What You Value and What You Want Out of Life

When you're starting out with financial planning, it's not about how much cash you have, how much cash you desire, or even how much cash you might have. 

It is about finding and investigating your aspirations and objectives, your aspirations for the future, and unearthing what is essential to you about cash so that you can strive towards living the greatest life possible. It is for the purpose of helping you live the greatest possible life.

If we look at it from a different angle, the question "what is the key to leading a life full of happiness and fulfilment?" It is quite improbable that anyone responded with the phrase "an investment that produces good returns." On the other hand, this could very well be significant in the context of the wider picture.

The procedure is getting to know the clients on a personal level, assisting them in determining what is obviously relevant to them, and then collaborating with them to fulfil their aspirations and objectives for the foreseeable future.

For several people, it is about discovering what is achievable, gaining an awareness of what is feasible, accomplishing individual objectives, and enjoying life while still making plans for the future. In addition, it is important to have the resources necessary to weather any unforeseen storms that might also arise.

What Is the Price of Financial Planning?

When it comes to the costs associated with financial planning, no standard scale is used across the sector. This is due to the fact that the necessary services and payment arrangements change across various clients and planners. 

A financial planner, often known as an adviser, can provide you with one-time advice about specific investment alternatives, or they can create you a comprehensive long-term financial strategy and follow up with you year after year as your life progresses. Either way, they can offer you investment guidance.

Our primary focus is on providing comprehensive financial guidance to our clients, with the goal of bridging the gap between their financial lives and the things in their lives that are most important to them. Before offering advice on how to build wealth or select an investing strategy, we feel it is necessary first to gain an understanding of the factors that you prioritise when it comes to financial matters. 

When it comes to the financial aspect of interacting with individuals, we will do so only when we can improve the quality of their lives. You are under no obligation to move forwards after the initial consultation; however, you are free to explore pricing with a financial advisor.

Does Employing a Professional Financial Planner Pay Off in the Long Run?

The more time and effort you are willing to put into following a financial planner's recommendations, the greater the rewards you will derive from working with one.

If you have a longer-term connection with a planner, they can assist maintain you on the road towards accomplishment in all areas of your existence, even if you only seek advice on a one-time basis.

This is because one-time counsel can assist you with making educated, realistic financial choices.

The advice comes with a wide variety of observable advantages, all of which will be brought up in direct conversation when you collaborate with a consultant to define your objectives.

It's possible, for instance, that a more cost-effective insurance policy or a streamlined investing choice that helps you save money would be suggested to you. 

You might be dissuaded from making a hasty financial choice based on your emotions, which would have been a very expensive choice. You might find that by concentrating on more specific objectives, you allocate your cash in various ways, so changing the message you send to yourself from "nice-to-haves" to "this is vital to me."

Also, there are an infinite number of intangible advantages. When we work with customers and ask them what they place the most importance on, we consistently get an emotional response from them. They worry less as a result. 

They have a greater sense of self-assurance. They have been put at ease. They have fewer points of contention with their spouse or partner or their parents. They have a greater sense of anticipation for their future. They are appreciative of the freedom that comes with having information.

Bottom Line

In summing up, it can be said that financial planning is an essential component of personal money management in Australia.

Having a competent financial planner can be of tremendous use due to the intricacy of many financial products and the ever-shifting landscape of the economic environment.

On the other hand, it is absolutely necessary to look for a financial planner who is both certified and experienced since this will allow them to provide you with advice that is specifically catered to your objectives and requirements.

Since you now have a greater knowledge of the significance of financial planning, you may be wondering, "Are financial planners useful in any way?" The answer to this question is an emphatic yes!

Whether you are putting money away for retirement, making preparations for a significant life event, or simply trying to enhance your financial well-being, the assistance of a financial planner can provide you with vital insights and advice that will help you reach your financial goals.

Working with a financial planner can provide you with a variety of benefits, such as individualised recommendations for financial planning, continuous assistance and direction, access to a broad selection of financial products, and a comprehensive comprehension of the Australian financial landscape.

In the end, a financial planner may assist you in reaching your goals and achieving financial security by assisting you in making well-informed decisions.

Hence, if you live in Australia and are seeking ways to better your financial status, one option you might explore is working with a trained financial planner.

You will be able to construct a personalised financial plan with their assistance and guidance, which will assist you in achieving your objectives and establishing a more secure financial future.

How do you feel about the prospect of collaborating with a financial planner? Have you worked with a financial planner in Australia who provided satisfactory services? Share your thoughts with us in the section below!

Content Summary

• In short, yes, financial planners can be useful in Australia.
• If you're still unsure about whether you need a financial planner, keep reading.
• The Australian Securities and Investments Commission (ASIC) is responsible for regulating the financial planning industry in Australia, and financial planners are required to achieve certain educational and professional criteria.
• You have arrived at this moment in your life, which marks a turning point or a substantial change in your circumstances, and it is time to make a crucial decision regarding your finances.
• You may just be one or two years away from retiring, but you may already be concerned about how you will fund your golden years.
• It's possible that you put all of your retirement savings into high-risk investment strategies that performed very well while the economy was booming and the stock market was soaring.
• But, because of a decline in the market, you are now afraid that you have lost everything.
• Or perhaps, after a handful of good years that turned into a number of bad years, your relationship with your partner has finally come to an end after a number of years of struggle.
• Maybe, even more tragically, after a number of wonderful years together, the person you love has passed away.
• This cherished person, with whom you had intended to share a future and who also took care of the finances, is no longer in your life.
• Yet, at this point in time, you are interested in exploring the potential for achieving the life you'd like to have.
• You can't help but think back to the most recent dinner you shared with those outgoing and charming pals and how they discussed their financial adviser.
•  Having a healthy amount of scepticism towards the financial planning sector is not difficult.
• The findings of the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Sector were made public in 2018, and they detailed instances of unethical behaviour inside the industry.
• Since the Royal Commission, many banks that hold financial licences (an ASIC requirement to be called a financial adviser is to start operating under a holder of a financial services licence) have made the decision to withdraw from the wealth management industry and instead concentrate on traditional banking services.
• New entrants into the field of financial advice are required to hold a degree relevant to the field of financial advice and are obligated to finish a certain number of specialised years before they are allowed to set foot in front of a customer.
• Employing a financial planner comes with a range of benefits and potential drawbacks.
• Creating and working towards your financial objectives with the assistance of a financial plan is beneficial.
• The preparation of a retirement strategy is among the most important components of financial planning.
• These services can be covered under the umbrella of comprehensive financial planning.
•  Last but not least, working with a financial planner can provide you with the sense of security that comes from knowing that you have a trained expert on your side who is looking out for your best interests.
• It is about finding and investigating your aspirations and objectives, your aspirations for the future, and unearthing what is essential to you about cash so that you can strive towards living the greatest life possible.
• Regarding the costs associated with financial planning, no standard scale is used across the sector.
• A financial planner, often known as an adviser, can provide you with one-time advice about specific investment alternatives, or they can create you a comprehensive long-term financial strategy and follow up with you year after year as your life progresses.
• Either way, they can offer you investment guidance.
• You are not obligated to move forwards after the initial consultation; however, you are free to explore pricing with a financial advisor.
• The more time and effort you are willing to put into following a financial planner's recommendations, the greater the rewards you will derive from working with one.
• If you have a longer-term connection with a planner, they can assist maintain you on the road towards accomplishment in all areas of your existence, even if you only seek advice on a one-time basis.
• This is because one-time counsel can assist you with making educated, realistic financial choices.
• On the other hand, it is absolutely necessary to look for a financial planner who is both certified and experienced since this will allow them to provide you with advice that is specifically catered to your objectives and requirements.
• Working with a financial planner can provide you with various benefits, such as individualised recommendations for financial planning, continuous assistance and direction, access to a broad selection of financial products, and a comprehensive comprehension of the Australian financial landscape.
• Hence, if you live in Australia and seek ways to better your financial status, one option you might explore is working with a trained financial planner.