Frequently Asked Questions
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The financial planning industry in Australia is subject to a high degree of regulation which has been rigorously evolved over recent years. The primary objective of these regulations is to protect the public when seeking advice from Practitioners who may influence a client’s decision to purchase a financial product.
Financial planning services may only be provided upon the granting of an Australian Financial Services Licence (AFSL) issued under very strict criteria by the Australian Securities and Investments Commission (ASIC). The licence permits the licence holder to deal in securities or advise on investments, which may be achieved through representatives or authorised representatives who have been approved by the licence holder to provide advice to clients. Representatives of licence holders must meet minimum training requirements and also be licenced by the Australian Securities and Investment Commission (ASIC). The licence holder is ultimately responsible for the advice given by their representatives and must ensure they meet all training and compliance prerequisites.
In addition to this, the Financial Advice Association Australia (FAAA), recognised as the peak professional body representing financial planners in Australia, has established a Code of Ethics and Rules of Professional Conduct by which financial planners are required to operate. The FAAA provides leadership and a professional framework that enable members to deliver quality financial advice to their clients.
Financial planning is about knowing what your financial goals are being able to put strategies in place that will help you achieve them. Financial advisers are qualified experts who can help you build, manage and protect your wealth.
A financial adviser can help you with:
- Growing your super
- Tax effective strategies
- Transition to retirement
- Retirement income stream options
- Retirement planning including investments – inside and outside of superannuation
- Life and income protection insurance
A Financial Adviser sets out to understand each client’s different needs and financial goals and to recommend an appropriate financial strategy.
A Financial Adviser will:
- Gather financial information about the client
- Identify financial and lifestyle goals
- Identify any financial issues
- Prepare a financial plan
- Implement the plan
- Review and revise the plan at regular intervals, or when circumstances change.
If your Financial Adviser gives you advice, they must give you a written Statement of Advice (SOA) which sets out:
- The advice they've given you.
- The information on which it's based.
- How they get paid (including any commissions).
- Any interests, associations or relationships that could influence them.
The financial advice takes into account your personal objectives, financial situation or needs with enough detail for you to make an informed decision about whether to act on the advice.
While many people can manage their day to day money issues, reaching your financial goals requires you to make a number of important decisions such as:
- Will you invest in shares, fixed interest or cash?
- Where should you invest – buy shares directly or through a managed fund?
- How can you manage your debt?
- Do you need to develop an estate plan
There is also the matter of your superannuation, tax, and how to protect yourself against financial misfortune as well as getting the most out of government benefits.
These are all complex issues, which is why many people use the services of a qualified Financial Adviser, using their experience and expertise to assist in making the tough decisions and to integrate the different aspects of their finances into one plan. Many also appreciate the peace of mind that comes from having a plan in place – the feeling that their finances are being taken care of, and that they’re heading in the desired direction.
A financial advisor provides significant value beyond simply investing money by offering a range of essential services and professional guidance.
- Comprehensive Financial Management: While investing is a key responsibility, advisors also handle portfolio rebalancing, tax planning, estate planning in coordination with lawyers, long-term care planning, and retirement spending strategies.
- Objective Perspective: Just as doctors don't perform surgery on themselves, even experts need outside advice to overcome personal "blind spots". An advisor provides an objective, 360-degree view of your finances, identifying weaknesses and offering educated advice that isn't clouded by emotion or misinformation.
- Saves Time and Reduces Stress: Most individuals are too busy to dedicate the hours of research needed to make confident investment choices. Financial advisors are immersed in this work daily, saving you time and stress.
- Emotional Discipline: During market downturns, investors often panic and make poor decisions. An advisor acts as a cool head, reminding clients that market dips are normal and can be opportunities to invest at a lower price.
- Professional Expertise: While some people hesitate to pay for advice, the cost of not having a professional can be much greater. Advisors have the education and experience to guide your decisions and operate under strict, regulated licenses, providing valuable peace of mind.
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