Assisting in setting your financial objectives (income, growth and security of capital) and providing tax efficient retirement and investment advice (including DIY super funds). Please refer to our Financial Services Guide for more information. This service is provided in conjunction with Professional Investment Services.
What is the financial planning process?
1. Checklist: Preparing for the first interview
Prior to the first interview, it is recommended you consider your financial and lifestyle objectives for the short, medium and long term.
These may include:
- Wealth creation
- Savings capacity
- Income requirements present & future
- Retirement planning
- Lifestyle needs
In addition, we recommend you compile the following documents (listed below) for the initial interview to enable your financial planner to obtain a clear understanding of your present financial position.
- Personal investment details including investment and superannuation statements
- Tax returns
- List of liabilities e.g. amount and applicable interest rates
- Additional assets
- Budget of living expenses
2. Initial consultation
On first meeting with a Professional Investment Services, the financial planner will provide you with a Financial Services Guide which outlines their;
- Responsibility for advice given
- Restrictions applying to advice given
- Fees and charges
- Complaint resolutions schemes available
- Privacy information
The first meeting objective is to ascertain current position, expectations, future objectives and risk profile. This is achieved by asking a series of personal and lifestyle questions supplied in a client data form.
At the conclusion of the meeting, the financial planner will seek your commitment to prepare a Statement of Advice (SoA) that addresses your financial situation and will detail any fees that apply to this process.
3. Statement of Advice (SoA)
After preparing the SoA, your financial planner will meet with you to go through it step by step and answer any questions that may arise. You must also confirm that the details within the SoA are correct.
At the conclusion of this meeting, your financial planner may schedule a follow-up to answer any further questions.
If you are happy with the recommendations and wish to implement the SoA, your financial planner will ask you to sign an ‘Authority to Proceed’ that formally documents your consent.
Your financial planner will assist you with the implementation process including completing forms and lodging the applications.
5. Review and service
Maintaining ongoing review and service of your financial plan is vitally important to achieving the optimum results in your financial future.
Many variables in your life can change over time, impacting on the suitability of your investment portfolio.
At a minimum, Professional Investment Services recommends annual review of your financial plan to ensure it continues to meet your needs.
Figuring out which investments can best help you deliver your comfortable retirement requires an understanding of:
- what your investment options are;
- how different types of investments tend to perform over long periods of time; and
- your financial goals, so you can pick an investment mix suited to your specific retirement
- investment objectives and risk tolerance.
Your primary investment choices can be broken into four general asset categories: Shares, Property, Fixed Interest/Bonds, and Cash.
Though each may play a role in your long-term strategy, investing directly in shares, property, fixed interest and cash is not always easy for the individual investor.
Creating the ideal investment mix involves identifying your personal objectives and risk tolerance and diversifying your investments accordingly. That is, choosing what’s appropriate for you and acquiring the appropriate investments.
Monitoring and modifying your investment mix over a long period of time can also be a daunting task. Keeping track of market trends, interest rates, emerging opportunities and other unforeseeable variables requires an expert eye and large amounts of time and attention.
Your Professional Investment Services adviser will determine your profile via a confidential client data collection form and advise you of your options to achieve your goals.
Geared investments (or investments made from borrowed money) are generally designed to increase the potential for tax deductible expenses (such as interest costs). The ultimate goal of this strategy is for the assets purchased with borrowed money to increase and create a profit upon sale after repayment of borrowed funds plus expenses. The assets purchased would normally be direct property or Australian listed shares.
The main risk associated with such a strategy is that the asset you purchase with borrowed funds will actually fall in value, even to the point where selling the asset doesn’t completely satisfy the underlying debt if selling is forced upon you at an inappropriate time. This will mean that, although you might receive extra tax deductions over time, you might actually lose capital (and carry over a debt) when you eventually sell the asset.
The potential to make a higher gain by borrowing exists only because of the added risk you take in using borrowed funds in the first place.
Most people prefer not to think about what happens when they die and put off planning for this situation. It is a very important issue to think about early and is an essential part of the financial planning process. Estate planning is determining how your assets will be divided on your death to ensure they are distributed efficiently and according to your wishes. Proper estate planning can reduce worry for your spouse and/or beneficiaries. All sorts of problems can occur if you have not planned your affairs properly.
It does not matter how small your personal wealth is, you should still ensure you have a current Will and plan your affairs. Appropriate estate planning can allow you to pass on your assets to your beneficiaries in a tax effective way and can minimise the effect of capital gains tax. As part of the process you should also check your superannuation funds and life insurance policies to see who you have nominated as your beneficiary and seek to make changes if necessary and possible.
Property and investments which are held as ‘joint tenants’ cannot be distributed through your Will. Ownership passes automatically to the surviving owner. If owned as ‘tenants in common’ your share in the property is distributed through your Will. You can buy a do-it-yourself kit and prepare your own Will. This may be cheaper but care is essential to ensure your Will is legally enforceable. The executor is responsible for carrying out your wishes after you die according to the instructions. You should choose someone you trust, who is responsible and willing to accept the responsibility. This person must be named as executor in your Will. You may appoint more than one person.