What is financial planning?

Financial Planning is the process of preparing, working toward and achieving life goals that are of a financial nature. Life goals could include purchasing a home, buying a business, retiring comfortably or acquiring investments.

 According to the FPAA (Financial Planning Association of Australia), financial planning involves a process of 6 steps. These steps are:

  1. Gathering your financial data
  2. Identifying your goals
  3. Identifying any financial issues
  4. Preparing your financial plan
  5. Implementing your financial plan
  6. Reviewing and revising your plan

Why is Financial Planning important? Financial Planning allows you to have a direction and make financial decisions that help you achieve your financial goals. It means that you have control over your finance and you understand the impact your financial decisions have on the achievement of your goals.

A Financial Planner (or Advisor) will guide you and offer invaluable knowledge to help you meet your goals effectively and sooner. The role of a skilled Financial Planner is to help you:

  • identify your goals
  • make informed decisions about your money
  • use and protect your money to your best advantage
  • choose financial products that suit your needs and circumstances

By law a financial adviser must have a license or must be an authorised representative of an business that holds an Australian financial services (AFS) license in order to provide financial advice. The Australian Securities and Investment Commission (ASIC) is the body responsible for regulating and administering legislation regarding the financial services industry. For more information about Financial Planning, please read through our Frequently Asked Questions.