How much do they cost? And where can I find one?
Financial planners are for the rich, right?
Well no, in fact, a financial planner can help if you are having trouble with your budget, want to start investing but don’t know where to start, or if you want help preparing financially for retirement.
The term financial planner is used interchangeably in Australia with financial advisor and each has an area of specialty such as cash flow and savings, investing, or senior care.
An accountant may also be licensed to provide financial planning advice, but his specialty is taxation.
Financial Planning Association of Australia President Marisa Broome said a financial planner can help you with your budgeting and savings strategy, as well as with questions such as how much money you should put in the pension retirement versus paying off your mortgage.
They can also help you determine where to put your money as you approach retirement, how much retirement pension you’ll need, and whether you should stay in your home or downsize.
“A lot of people think they have to be rich to see a financial planner and that a financial planner only gives investment advice,” Ms. Broome said.
“It’s much more than that. It’s really about strategy and goal setting and… what you need to do each year to achieve those goals. “
So how much does it cost?
Costs obviously vary from planner to planner depending on their business model and expertise, but, as a guide, a detailed financial plan for someone close or retired costs around $ 3,000.
Ms Broome said the return on investment becomes clear in the long run, but sometimes the benefits are more immediate.
“(With) people spending more than they earn, you might actually see really big changes in the first year for someone like that after you teach them to change their money behaviors. “
What’s the process?
You have an initial consultation with a financial planner which can take anywhere from around 15 minutes to an hour to help you decide if you want to work with them.
This conversation is billed in some cases and free in others, depending on the planner.
Ms Broome said the financial planner should then give you a letter of commitment that will detail exactly the process and the costs involved if you decide to go ahead.
It is important to consider whether the implementation of their advice is included in the initial cost or whether it will be billed separately.
Ms Broome said it was also wise to clarify their area of expertise and the profile of their average client.
How do I find a financial planner near me?
Recommendations from family or friends are a good place to start, and you can also use the “find a planner” tool on the FPA website, where you can search by zip code.
What professional standards must they have met?
A financial planner must have an Australian license in financial services and have passed the Financial Adviser Exam (established by the Financial Adviser Standards and Ethics Authority) by the end of this year.