6 Steps to Financial Planning

financial planning6 Steps to Financial Planning

Since very few people seem to understand what financial planners do and a common question seems to be “What am I paying you for?” I thought I’d give a very brief introduction to financial planning and the work that goes into creating a financial plan.

The financial planning industry is one heavy with compliance and we have a lot of boxes to tick to avoid having authorities shut us down. The entire process can feel cumbersome (for both client and planner!) however it’s a necessary evil that is the only way to get a conclusive, transparent, positive outcome for the client.

Financial planning can be broken down into 6 major steps:

  1. Establishing a relationship and clarifying what the relationship will be (much like dating!)
  2. Collection of client information and specifically identifying goals for the client
  3. Evaluation of the client’s current financial position
  4. Researching recommendations and preparing comparisons/alternatives to current position. This includes preparation and presentation of a Statement of Advice. Planners are not allowed to simply give you verbal advice, it MUST be written.
  5. Implementing the recommendations
  6. Monitoring the recommendations and maintaining the relationship

Financial planners are required by law to only act in their client’s best interest. This is called Best Interests Duty. It may sound like common sense to do the right thing by our clients, however there were planners out there that were doing the wrong thing by their clients for their own benefit and sadly all planners are now paying the price.

What does the above all mean to a client? Probably not much, other than viewing it as lots of paperwork. They put their trust in us that we know what we are doing. They also trust that we will only make recommendations that are appropriate for them and will better their situation. Without trust, there can be no relationship between a planner and client, and trust can only be built over time and with good results, which is what we aim for in every client/planner relationship.

If you have any questions please give us a call at Southern Cross Financial on 08 6267 2233 or email us

Shannon Bennett













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