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Financial Planning

What Is Financial Planning?

The majority of professional financial planning organisations would say that financial planning is a systematic approach where the financial planner helps the customer to maximise their existing financial resources by using various tools to achieve life goals. Or, financial planning is the process of meeting your life goals through proper financial management.

The 6 Steps of Financial Planning

Life goals vary for different people at different stages of life. They may begin with buying a home, then saving for children’s education and later planning for retirement. Whatever the goals however, financial planning is a process that consists of specific steps that help you to see where you are financially. Using these steps you can work out where you are at present, what you may need in the future and what you must do to reach your goals.

There are six basic steps in the financial planning process:
1. Collecting your financial data, e.g. details about your present income, debt level, financial commitments etc
2. Identifying your goals
3. Identifying any financial issues or deficiencies between now and where you want to be
4. Preparing your financial plan - which includes identifying recommended investments and your attitude to risk
5. Implementing your financial plan
6. Reviewing and revising your financial plan to ensure it stays up-to-date and relevant to the current economic climate and your changing lifestyle.

Financial Planners

As people go about the business of setting (and changing) their life goals, they will generally collect advice and information from many different sources, including professional financial planners.

A financial planner is a professional who uses the financial planning process to help you meet your life goals. A planner looks at all your needs including budgeting, saving, taxes, investments, insurance and retirement planning. In particular a planner looks at your personal or lifestyle situation and objectives to help identify your immediate needs as well as giving suitable advice that helps you to both protect and build assets.

Ideally this advice should also allow an understanding of how various individual financial decisions may affect other areas of your finances and the likely effect on your long term goals.

Choosing a financial planner

The most important factor involved in choosing a financial planner is selecting one who is qualified, experienced and licensed to help you.

Financial planners are often referred to in a variety of ways: as financial planners, and (when they are linked to an Australian Financial Services Licensee, such as Charter Financial Planning) as authorised representatives. However, the critical deciding factor should not be so much what they are called, but rather that they meet the necessary criteria.

The Financial Planning Association (FPA) is the peak body for specialist, professional financial planners and all practicing members must adhere to the FPA Code of Ethics and Rules of Professional Conduct. The FPA also requires its members to use the Financial Industry Complaints Service in dealing with any complaints.

For further information on the FPA Code of Ethics and Rules of Professional Conduct, or to find a financial planner in your area, contact the Financial Planning Association (FPA),

You can also request a free copy of the booklet, Getting Advice, a free, joint publication with the Australian Securities and Investments Commission (ASIC) which outlines criteria for the choice of an investment adviser and other associated issues.

To protect investors and consumers, anyone who sells or advises on financial products must have a licence from ASIC (or be employed by, or authorised to represent, someone who holds a licence). You can check the MoneySmart website to see if an individual is an authorised representative.

Monitoring Your Financial Plan

A financial plan should be monitored at regular intervals to make sure it is still relevant to your needs and accomplishing the desired results. In particular as a person’s financial situation or objectives change, or as significant trends develop in the economy, a plan should be reviewed.

That will enable you to make the appropriate adjustments, keeping you on target towards achieving your financial goals or to change those goals based on your current financial situation.

It is important then, when looking for a financial planner, that you choose someone with whom you feel you can build a long-term relationship.

And finally remember that all financial investments involve risks. Discuss fully with your financial planner and other members of your family the risks that you’re prepared to take and factor this into your financial planning process. Contact the FPA for their free booklet, The Trade Off - Understanding Investment Risk.

Centrelink’s Financial Information Service (FIS)

FIS assists people to make informed decisions about investment and financial issues for their current and future financial needs.

They are not financial planners and do not sell advice or purchase investment products. To make an appointment to see a FIS officer, tel. 13 2300 (local call cost).


Seniors Information Service is supported by the Australian Government Department of Social Services. Visit the Department of Social Services website ( for more information. Although funding for this service has been provided by the Australian Government, the material contained herein does not necessarily represent the views or policies of the Australian Government.