Investment Advisors, Mortgages Brokers Real Estate Agents and Insurance Agents often call themselves Financial Planners.
This creates a huge amount of confusion in the industry as to just what is a Financial Planner and what does he do?
The simple answer is that a Financial Planner develops and implements financial plans for his or her clients. Some of the areas a financial planner will advise on are: retirement planning, superannuation, taxation, debt management, insurance and risk, estate planning, managed investments, securities and futures markets. Financial planners may also specialise in such areas as: ethical investments, loans and mortgage advice, taxation advice and more.
The process the Financial Planner will follow would resemble the following. Gather a clients’ financial data such as income, cash flow, debts, loan repayments, investments and living expenses; identify clients’ goals, objectives and their attitude to risk; analyse clients’ financial status in regard to their objectives and identify any issues or problems; prepare a written financial plan; assist clients in implementing the financial plan; regularly review and revise plans based on changes in the client’s needs and changes in investment markets and the economy; refer clients to obtain services outlined in the financial plan such as banking or insurance; and keep up personal knowledge of changes in legislation.
It is not until the plan is prepared for the client and the client has agreed that the Plan will help them accomplish their goals that the Financial Planner will then recommend specific products or introduce the client to specilists such as mortgage brokers, real estate agents or insurance adivsors.