What to expect in the Financial Planning Process

The financial planning process is not well understood because we have lived in a world where product salesmen and share brokers were referred to as financial planners.  Their objective was simple; sell a product/portfolio to you and get paid a commission.   It was a transactional experience.  However, this process misrepresents the real financial planning process.  If you want ‘good’ personal financial advice based on your situation then you need to expect and deserve more in terms of professionalism and time.  It is a relationship.

The old saying ‘Rome wasn’t built in a day’ is a very appropriate description for the financial planning process; in a number of ways.  

Firstly, financial advice is very regulated and has become more so over the last 10 to 15 years.  A new code of ethics was introduced by FASEA that must be complied with by all financial advisers from 1 January 2020.   The code and standards within it (https://www.fasea.gov.au/code-of-ethics/) are far more wide reaching than a feel good group of principles.   They form a legal obligation and foundation of conduct for all financial advisers.  The code and standards within it have been introduced for the public’s ultimate benefit.

Secondly, if you are serious about getting advice to make a real difference to your financial future, make informed financial decisions, and get value from the advice then you need to engage with your adviser and allow them to get to know you and your goals/conundrums, and that takes time.   There are a number of factors that affect this including the onboarding, initial advice, and implementation and you should allow up to 12 months to complete this process.  The more complicated the advice and the broader the scope, the longer it takes.  

Thirdly, rules change, stuff happens and life does not always work out how you intended.  The ongoing relationship with your financial adviser and the priorities can change each year, but again, it is about making informed financial decisions.  I get my car serviced every six months.   This service is more than just an oil change.   I have a good mechanic, trust him, and rely on him to keep me informed of anything that I may need to be aware of about my car, even if I think my car is running well.   The ongoing relationship with a good financial adviser is no different.  They can be relied upon to keep you aware of your financial position relative to your goals, inform you of any changes (such as government legislation) that may affect you, and to help implement changes if needed.