Why do you need a financial plan?

Financial planning is often misunderstood.

I think this is because people typically associate the potential solutions a financial planner can offer – like investing, insurance or super advice for example – as being the main value of the financial planning relationship. But in reality it is the plan we help you create itself, that is where the true value lies. A plan that is yours – to achieve what is important to you – and only then, do we relate the products that can help you achieve your objectives to your situation.

Ultimately, financial planning is about easing worries you may have about the future and taking control of your money in a way that allows you to get on with your life. 

 

WHAT KIND OF PEOPLE TEND TO USE FINANCIAL PLANNERS?

It is a common fallacy that only those with lots of money have any need for a financial planner. Regardless of how careful you are with your money, dealing with the tricky intricacies of taxation, investment, debt markets and financial regulations can be difficult for even the most money conscious of earners. 

In many ways, dismissing the service of a financial planner as a luxury you don't really need can be an excuse to put off what may seem scary or overwhelming. The world of finance can be demoralising if you believe owning the home of your dreams or the ability to pay off all of your personal or business debt is out of reach, for example. 

A finance professional will help provide innovative strategies to nurture a healthy financial outlook and make realistic plans that will allow you to reach your desired goals at different stages of life.

 

SHOULD I EVER CONSIDER PLANNING OUT MY OWN FINANCIAL FUTURE?

Ultimately, while many people believe they are fully capable of planning for their own financial future, a financial planner is trained to develop optimal strategies for monetary health. 

Financial planning is not just something people can walk into and it takes years of training and reading up on the world of finance to be any good.

If you have sourced a financial planner that can demonstrate that they have your best interest in mind and that they are also highly qualified, then they should also be able to demonstrate why there is value in receiving advice over going it alone.

For this reason, before you choose to try and do it yourself, you should hear a financial planner out and see how you feel at the end of it.

After all, feeling sorted and secure in your finances is a great way of relieving stress and contributes to your overall sense of well-being. 

 

WHAT ARE THE CONSIDERATIONS TO TAKE INTO ACCOUNT AT PARTICULAR LIFE STAGES?

As mentioned, your financial priorities will tend to shift as you reach particular life stages. Depending on your age, here are some of the ways including a reflection of the people we are best able to help:

YOUNG ADULT TO EARLY MIDDLE-AGE

Your early years of adulthood can be the most exciting and stressful, as you lay out your path for the future and decide what you want from life. 

Financial planners can help you plan for events such as buying your first home, setting up a business, getting married, having kids, or even travelling the world. 

In particular, for young women and men who are keen to build their own place in the world through a business of their own or as a lynchpin in a growing company, getting the right financial guidance can change their trajectory for the better.

MIDDLE-AGE

By this point, you are likely keen to protect the lifestyle you have built up for yourself, as well as those that may be under your care. 

Many people change gears in this phase, going from a growth phase to harvesting what they have been accumulating for their retirement. New considerations like children, spouses and multiple sources of income can complicate things.

In this case, financial planners may be able to help with Tax management, Inheritance considerations, Income protection and Life insurance, Investments and planning for Retirement.

PREPARING FOR RETIREMENT

If you are on the cusp of retirement, you have a great deal to think about financially. We are, in general, living longer and that means longer retirement.

As you switch from earning a salary to relying on a pension or savings, financial planners can help with exiting a business, eliminating debt, healthcare concerns, helping the children of their clients, and the setting up of Wills and trusts.

RETIREMENT

Retirement represents a great opportunity to indulge in pursuits that you never had the time for before. 

Financial planners can help make retirement as stress-free and enjoyable as possible by planning for capital preservation, estate planning, healthcare plans, asset protection, travel funds, and the mitigation of inheritance tax.

Retirement may be the last stage of your financial life, but that doesn't mean you can just set your finances on cruise control. Careful planning can actually increase your net worth while also helping preserve it well into retirement.

 

HOW DO FINANCIAL PLANNING MEETINGS WORK?

There is no ‘one size fits all’ approach to financial planning, and every professional planner will need to undertake thorough work with you to understand your goals and needs. This could include:

ESTABLISHING AN UNDERSTANDING OF WHAT YOU BOTH EXPECT FROM THE COLLABORATION

Your financial planner will start off by explaining their role in full, finding out your monetary needs, and ensuring that they will realistically be able to meet them. They will also offer plenty of time for questions about their work and what they charge for their services.

ESTABLISHING WHAT YOU VALUE AND WHAT YOUR FINANCIAL GOALS ARE

The foundation of any good financial plan is understanding what you value most in life and what your goals are. Your financial planner will help you articulate your values and develop your goals.

A THOROUGH ASSESSMENT OF YOUR FINANCES

Your financial planner will be able to come up with a realistic plan for you by looking at your assets, investment strategies, taxes, insurance, and liabilities. 

PREPARING AND IMPLEMENTING A FINANCIAL PLAN

A financial planning service will also be able to recommend the best products, services, and strategies to meet your goals, as well as answer any potential questions. They can then put this into action by liaising with the necessary specialists such as Solicitors or Accountants.

UNDERTAKING REGULAR REVIEWS

Some aspects of your plan may need to be revised depending on the economy or changes to your personal situation, so a financial planner will review it regularly.

PLANTING SEEDS, IN HARVEST MODE OR READY TO RELAX

Whether you're just starting on your own financial journey, in the middle of your career or nearing the end of your working days, a solid financial plan can help.

If you feel comfortable with your finances but feel like your money could be doing more for you, please call the team at Yield. We're here to answer your questions.

Visit our Contact Us page to start the conversation.

Written by James McFall

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About the Author

Founding Director and principal adviser of Yield Financial Planning, I founded Yield in 2006 with a vision of enabling Australians to live the life they love now and retire securely. Advising on Share and Property markets for more than 20 years, I understand that to provide the best advice, our team must have a deep connection with what is important to our clients and it is in our company DNA to constantly challenge ourselves to evolve and innovate ways we can deliver a consistently exceptional client experience. I have been privileged to be recognised by the Financial Planning industry as the Certified Financial Planner (CFP) of the year, national finalist for 2018 and more recently by the IFA, as ‘Goals Based Adviser’ of the year finalist in 2019. This honour is alongside our company being named a finalist for the IFA Client Servicing Company of the year.