What is a financial planner?

It can be hard to ask for help, but when it comes to personal finances, reaching out to a professional could save you big in the long run.

What’s the difference between financial planners and financial advisers?

Financial adviser is a general term that refers to a professional that assists an individual or company in managing their money, including stock brokers, insurance agents and bankers.

According to Investopedia, a financial planner is a type of financial adviser:

Financial planners are a qualified investment professional who helps individuals and corporations meet their long-term financial objectives by analysing the client’s status and setting a program to achieve that client’s goals.

What does a financial planner do?

A financial planner is a great resource to help you do just that – plan and manage your finances by providing money-management advice.

According to the Financial Planning Association (FPA), whether you’re struggling with debt, getting a divorce, buying or selling a home, growing your family or have lost a spouse, a financial planner can help you plan for difficult and stressful financial situations.

Financial planners will assess and review your finances, help you to identify your goals and offer help with what you should to differently. They will help you to see how much you can change and what amount you can save to help achieve your goals over time.

How much does a financial planner cost?

This will depend on your individual circumstances and the complexity of your money-management issues and concerns.

Financial planners legally must disclose all forms of payment and fees and ensure you understand and approve these before you move forward, including upfront fees, administrative and ongoing fees. 

How do I find a financial planner?

The Australian Securities and Investments Commission (ASIC) recommends reviewing industry associations’ ‘find an adviser’ services.

In Australia, the leading industry body is the Financial Planning Association (FPA). Their website offers helpful resources to find qualified financial planners in your area.

Can I trust them with my finances?

Entrusting a professional with your finances can be a stressful decision, so it pays to do your research and ensure they are qualified.

The FPA warns that when researching financial planners, alarm bells should start ringing if you see any of the following:

• Doesn’t have professional license, qualifications or FPA membership
• Doesn’t take time to learn about your individual circumstances, needs and goals
• Is more interested in selling you a product than developing a strategy for you
• Promises you the world (i.e. high returns and low risk) and tells you not to worry
• Avoids questions and withholds information
• The fees and charges are not clear or appear excessive.