What Does a Financial Planner Do?

What does a financial planner do in Australia? Are they just the ones who help you plan your investments, or is there more to their job? If you're someone who has been pondering these questions, then you're in the right place.

In short, a financial planner in Australia helps you make sound financial decisions and achieve your financial goals by providing expert advice on investment, insurance, taxation, retirement planning, and estate planning.

They analyse your financial situation, assess your risk tolerance, and help you develop a personalised plan that suits your needs.

But what sets apart an excellent financial planner from the rest? How do you find someone you can trust with your hard-earned money?

In this article, we'll delve deeper into the world of financial planning and take you through the qualities you should look for in a financial planner.

We'll also provide you with some tips on how to choose the right financial planner for you.

So, without any further ado, let's dive into the world of financial planning!

What Is a Financial Planner?

At a high level, financial planners assist their customers in accomplishing the financial goals that they have set for themselves. This includes working with consumers to comprehend their current financial situation, determining their future objectives, and then customising a strategy that will assist them in accomplishing those objectives.

The process that each individual uses to plan their finances is unique. Some may choose to specialise in a specific field, such as tax or investment planning. Some businesses offer more comprehensive financial planning for their customers than others.

What does a financial planner actually do on a daily basis? The following is an outline of the different kinds of responsibilities that will fall on your shoulders:

• Have a meeting with customers to talk about their monetary ambitions.
• Doing an analysis of their current financial situations by taking into account things like revenue, expenditures, assets, and debts.
• Conducting research into the various choices that can help them better their financial positions so that they can reach their goals. These possibilities could include things like investments and pension plans, as well as methods to cut back on debt or expenditure.
• Putting together financial plans that detail your suggestions will be known as a Statement of Advice (SOA).
• Meet with customers to check their progress and review their plans in light of any changes in their situation.

What, then, is the difference between a financial advisor and a financial planner if that's what a financial planner does?

The phrase "financial advisor" refers to a broad category of professionals who assist their clients with the management of their money. This category comprises a wide range of professionals, such as financial advisors, mortgage brokers, and insurance agents.

The field of financial planning is one that is strongly governed by regulations. In order to provide advice on financial matters, you are required to have the appropriate qualifications.

Depending on the restrictions imposed by ASIC for the position they play, financial planners and advisors may also be required to hold an Australian Financial Services (AFS) licence or be authorised under that licence.

The Future of the Financial Planning Industry in Perspective

The field of financial planning has been subject to a great deal of innovation over the course of the previous ten years. This is excellent news for clients who use the expertise of a financial planner, and it is also a step in the right direction for the financial planning industry as a whole.

The field of financial planning in the present day is extremely dissimilar to the one that existed in the past. The reforms have worked to improve the overall quality of the regulatory framework and ethical standards, as well as the quality of the financial guidance that consumers gain.

The growth projections for financial investment advisors and managers are also optimistic, coming in at slightly over 10 per cent for the next five years. The annual compensation of a financial advisor in Australia often falls somewhere between $90,000 and $130,000 on average. But it's important to keep in mind that these average salaries are merely a guideline to help guide your expectations. Your level of expertise, in addition to a great number of other considerations, typically determines the actual compensation you receive.

It is not enough to have expertise in financial matters to be successful as a financial planner. Effective financial advisors also possess the ability to cultivate robust relationships with the customers they serve. It is not a simple choice to put your faith in another person with your financial future. If you are considering pursuing a career in this sector, it is crucial to think about the work you will be doing and evaluate how well you are matched to the tasks that will be required of you.

Would you like to speak to Klear Picture retirement specialist? Book a discovery session by calling: (03)99981940 or email on team@klearpicture.com.au.

How to Become a Financial Planner

1. Obtain Your Degree

To become a financial planner, you must have earned at least a bachelor's degree, preferably with a concentration in economics, finance, business, statistics, or a related field.

2. Volunteer and Be an Intern

Do not let your fear prevent you from applying for internships. The foundation of a student's education is the academic training received in a classroom setting; however, aspiring Financial Planners have the opportunity to gain priceless experience in the real world by participating in an internship.

You will have the opportunity to put what you have learned into practice while also receiving guidance and direction from more experienced professionals in the industry when you participate in an internship programme.

3. Improve Your Skill Set by Acquiring More Certificates and Licenses

Financial Planners can choose to specialise in a variety of areas and earn a variety of certifications, including the Chartered Financial Analyst (CFA) and the Certified Financial Planner (CFP).

It's possible that Financial Planners working for large companies and clients may be expected to maintain their education past the undergraduate level. After gaining experience in their sector for a number of years, a significant portion of Financial Planners goes on to earn an MBA while maintaining their full-time employment.

4. Make Contact With the Major Companies

Research prospective jobs to identify firms that meet your needs or interests, and then customise your resume and cover letters for each company. Apply for entry-level roles even if they are not currently advertising any openings; this will ensure that the company will keep you in mind if and when they hire new employees.

Don't forget that posting your CV on social media and searching for vacant positions is a great method to find new employment opportunities.

What’s the Difference Between a Financial Planner and a  Financial Advisor?

The term "financial advisor" refers to any expert who, in one way or another, can provide assistance with the management of one's own finances. On the other hand, a financial planner is a type of financial advisor who specialises in a particular subfield of the financial industry, like financial planning.

1. Financial Planner

If formulating a strategy to achieve your long-term monetary objectives is one of your primary objectives, then it is highly recommended that you seek the assistance of a professional financial planner. You have the option of searching for a planner who specialises in tax planning, investment planning, retirement planning, or estate planning. You might also ask the planner about their credentials, such as Certified Financial Planner (CFP) or something similar.

CFPs, Certified Investment Management Analysts (CIMAs), Chartered Financial Analysts (CFAs), and Chartered Financial Consultants (ChFCs) must all complete additional coursework, pass exams, and demonstrate relevant job experience to earn their respective designations.

2. Financial Advisor

A financial advisor is a professional who can assist you in the management of your finances and is referred to by the more general phrase "financial advisor." They could act as a broker for the sale and purchase of your stocks, manage your investments, and assist you in developing an all-encompassing estate or tax plan.

In order to provide services to members of the general public, a financial advisor needs to be in possession of a valid AFS licence. It's possible that he or she has other certifications as well, depending on the services offered.

Clients that work with Financial Advisers who are additionally Certified Public Accountants (CPA) reap even more benefits from working with such professionals.

Would you like to speak to Klear Picture retirement specialist? Book a discovery session by calling: (03)99981940 or email on team@klearpicture.com.au.

An Analysis of the Many Charges

When beginning the process of hiring a financial advisor or planner, it is essential to have a clear idea of the kinds of services you require. This way, you won't have any surprises when it comes time to hand over your money. When your financial planner or advisor offers you a cost breakdown, it will also be simpler for you to understand what they are telling you.

1. Planners

It is possible that your financial planner will charge you a portion of the assets under their management if they are delivering an ongoing service to you. In addition to that proportion, some impose a flat amount or an hourly price on their clients.

2. Advisors

The common form of remuneration for financial advisors is one of these three approaches. This will be broken down into its component parts so that you will be well-prepared to go shopping when the time comes.

1. Fee-Only

You pay the financial advisor a fee for every individual service they carry out for you when you use a fee-only service. If your financial advisor describes their services as "fee-only," you have the right to require them to present you with a summary of the products and services they provide along with a breakdown of the fees associated with those services.

These industry experts don't use any kind of sales gimmick, and the services they provide are typically straightforward and to the point.

2. Fee-Based

Financial advisors that work on a commission basis will charge you an up-front fee in addition to earning a commission on any financial products you buy from them. These pros will most likely give you the hard sell as they attempt to offer you more expensive versions of the things you already require.

3. Commission

Commission-based advisors can only make money off the items and services their clients purchase from them. They are often compensated by means of a third-party organisation. When these industry experts offer you several financial solutions for your portfolio, you can anticipate a sales pitch and possibly even some pressure to make a decision.

Why Hire a Financial Planner?

Let's understand why hiring a financial planner is crucial. Here are a few reasons:

• Financial planners can help you create a personalised financial plan based on your goals, risk tolerance, and current financial situation.
• They can provide you with investment advice and help you make informed investment decisions.
• Financial planners can assist you in managing your debts and improving your credit score.
• They can help you plan for retirement and ensure you have enough savings to achieve your retirement goals.

Tips for Hiring a Financial Planner

1. Determine Your Financial Goals

The first step in finding the right financial planner is to determine your financial goals. Do you want to save for retirement, buy a house, or start a business? A clear idea of your goals will help you find a financial planner specialising in those areas.

2. Look for Credentials and Certifications

When hiring a financial planner, looking for credentials and certifications is essential. Look for a planner who holds a Certified Financial Planner (CFP) designation or an Australian Securities and Investments Commission (ASIC) license. These designations indicate that the planner has the necessary knowledge and skills to provide quality financial advice.

3. Consider the Planner's Experience

Experience is crucial when it comes to financial planning. Look for a planner who has worked with clients in similar situations as yours. Ask about their experience in managing investments, retirement planning, and debt management.

4. Ask for Referrals

One of the best ways to find a reputable financial planner is to ask for referrals. Talk to friends, family, and colleagues who have previously worked with financial planners. Ask them about their experience and if they would recommend their planner.

5. Understand How the Planner is Compensated

Before hiring a financial planner, it's essential to understand how they are compensated. Some planners charge a flat fee, while others work on commission. Ensure you understand how much you'll be paying and what services are included in the fee.

6. Review the Planner's Communication Style

Working with a financial planner who communicates well and understands your needs is crucial. Schedule a meeting or a phone call to discuss your financial goals and see if the planner is a good fit for you.

7. Check the Planner's Track Record

When hiring a financial planner, it's essential to check their track record. Look for a planner with a proven track record of helping clients achieve their financial goals. Check online reviews and ask for references.

8. Understand the Planner's Investment Philosophy

Every financial planner has a different investment philosophy. Some planners are conservative and focus on low-risk investments, while others are more aggressive and invest in high-risk assets. Ensure you understand the planner's investment philosophy and if it aligns with your financial goals.

9. Get a Written Agreement

Before hiring a financial planner, ensure you get a written agreement outlining the planner's services, fees, and any other important information. Review the agreement carefully and ask questions if you don't understand something.

10. Trust Your Instincts

Lastly, trust your instincts when hiring a financial planner. If something doesn't feel right, don't be afraid to walk away. Working with a planner you feel safe and confident with is essential.

Bottom Line

In conclusion, a financial planner plays a crucial role in helping individuals and businesses manage their finances effectively in Australia.

They offer valuable advice on financial matters such as investment, tax planning, retirement planning, risk management, and much more.

With their knowledge and expertise, financial planners can help you make informed decisions about your finances and achieve your financial goals.

If you're looking for a reliable and experienced financial planner in Australia, many options are available.

You can search online for reputable financial planning firms, ask for recommendations from friends and family, or seek advice from a professional association like the Financial Planning Association of Australia (FPA).

Hiring a financial planner can be a smart investment in your financial future. So, don't hesitate to seek out professional guidance and start planning for a more secure and prosperous future today!

Have you ever worked with a financial planner before? If so, what was your experience like? If not, what's holding you back from seeking professional financial advice? Share your thoughts in the comments below!

Content Summary

• In short, a financial planner in Australia helps you make sound financial decisions and achieve your financial goals by providing you with expert advice on investment, insurance, taxation, retirement planning, and estate planning.
• They analyse your financial situation, assess your risk tolerance, and help you develop a personalised plan that suits your needs.
•  The field of financial planning is one that is strongly governed by regulations.
• In order to provide advice on financial matters, you are required to have the appropriate qualifications.
•  Depending on the restrictions imposed by ASIC for the position they play, financial planners and advisors may also be required to hold an Australian Financial Services (AFS) licence or be authorised under that licence.
•  The field of financial planning has been subject to a great deal of innovation over the course of the previous ten years.
• This is excellent news for clients who use the expertise of a financial planner, and it is also a step in the right direction for the financial planning industry as a whole.
•  The field of financial planning in the present day is extremely dissimilar to the one that existed in the past.
•  The growth projections for financial investment advisors and managers are also optimistic, coming in at slightly over 10 per cent for the next five years.
• The annual compensation of a financial advisor in Australia often falls somewhere between $90,000 and $130,000 on average.
•  It is not enough to have financial expertise to succeed as a financial planner.
• Putting your faith in another person with your financial future is not a simple choice.
•  To become a financial planner, you must have earned at least a bachelor's degree, preferably with a concentration in economics, finance, business, statistics, or a related field.
•  Do not let your fear prevent you from applying for internships.
• The foundation of a student's education is the academic training received in a classroom setting; however, aspiring Financial Planners have the opportunity to gain priceless experience in the real world by participating in an internship.
•  You will have the opportunity to put what you have learned into practice while also receiving guidance and direction from more experienced professionals in the industry when you participate in an internship programme.
•  Financial Planners can choose to specialise in a variety of areas and earn a variety of certifications, including the Chartered Financial Analyst (CFA) and the Certified Financial Planner (CFP).
•  It's possible that Financial Planners working for large companies and clients may be expected to maintain their education past the undergraduate level.
• After gaining experience in their sector for a number of years, a significant portion of Financial Planners goes on to earn an MBA while maintaining their full-time employment.
•  Research prospective jobs to identify firms that meet your needs or interests, and then customise your resume and cover letters for each company.
•  Don't forget that posting your CV on social media and searching for vacant positions is a great method to find new employment opportunities.
•  A financial advisor is a professional who can assist you in the management of your finances and is referred to by the more general phrase "financial advisor."
•  In order to provide services to members of the general public, a financial advisor needs to be in possession of a valid AFS licence.
•  When beginning the process of hiring a financial advisor or planner, it is essential to have a clear idea of the kinds of services you require.
• When your financial planner or advisor offers you a cost breakdown, it will also be simpler for you to understand what they are telling you.
•  Financial advisors that work on a commission basis will charge you an up-front fee in addition to earning a commission on any financial products you buy from them.
• They are often compensated by means of a third-party organisation.
•  The first step in finding the right financial planner is to determine your financial goals.
• A clear idea of your goals will help you find a financial planner specialising in those areas.
•  When hiring a financial planner, looking for credentials and certifications is essential.
•  Experience is crucial when it comes to financial planning.
• Some planners charge a flat fee, while others work on commission.
•  Working with a financial planner who communicates well and understands your needs is crucial.
• Schedule a meeting or a phone call to discuss your financial goals and see if the planner is a good fit for you.
•  When hiring a financial planner, it's essential to check their track record.
• Look for a planner with a proven track record of helping clients achieve their financial goals.
•  Every financial planner has a different investment philosophy.
• Ensure you understand the planner's investment philosophy and if it aligns with your financial goals.
•  Before hiring a financial planner, ensure you get a written agreement outlining the planner's services, fees, and any other important information.
•  Lastly, trust your instincts when hiring a financial planner.
• Working with a planner you feel safe and confident with is essential.