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What to expect from your first meeting with a Power2 Financial Planner

An appointment with a financial planner doesn’t have to be scary. Here’s what you need to know.

In a good meeting, you can count on being the one doing most of the talking while being reminded that it’s your money, and your decision.

As is so often the case, we fear what we don’t know. It can be a daunting task to muster up the courage to finally face our finances head-on and make the decision to meet with a financial planner. Many of us don’t know what to expect and find our self asking questions such as, “What should I know before speaking to a planner or advisor? What should I bring? What kinds of questions will they ask me?”

While the nature of every meeting is unique, as the needs of every client will vary, here’s a typical outline of what your conversation with a financial planner may look like:


Financial snapshot
Before we can figure out where we’re going, we need to determine where we are today. You would never attempt to give a friend directions if you didn’t know where they were coming from. Much the same with your financial plan; your planner can’t help guide you until he or she knows the starting point. You’ll discuss your current assets that may include a savings account, checking account as well as any superannuation you have through current or former employers. It’s also important to review any debt that you may be carrying. This may include credit cards, student loans, car loans or perhaps a mortgage. Your adviser will also consider any existing life insurance cover you hold as mitigating risk an important part of planning.


Cash flow analysis
Once a baseline has been established for your assets and your liabilities, it’s time to assess your monthly cash flow. This is a fancy way of saying you’re going to discuss how much money you make every month, how much you spend each month, and how much you are saving. Your planner is getting an understanding of how much you have available to reasonably save and invest on a monthly basis. This is a great time to discuss where you would like to cut back on certain expenses. Whether you’re spending too much on happy hours, expensive dinners, or shopping at your favorite boutiques and department stores, we all have areas where we can cut back on spending.


Setting goals
Now that we know where we stand financially and how much we have available to invest each month, we need to figure out what we’re doing with those savings. This is how you know your advisor is focused on helping you meet your objectives because this is where you’ll be asked questions like, “What are your goals? What are you hoping to achieve? What’s most important to you?” To help you put together an investment plan, your planner needs to know when you plan on needing that money. Are you hoping to buy a house in the next three to five years? Are you saving to afford a big vacation every year? Are you trying to pay off your debt? Are you planning to put away funds to cover unforeseen expenses in an emergency savings account? Are you looking to start saving for your retirement? By prioritizing your goals, your planner can help put a plan in place that is intended to help get you there.


Finance 101
Based on the information that you’ve shared, your planner will discuss with you some preliminary thoughts and ideas around your expressed ideas and goals. Topics touched on could include Investment Risk and Return, Saving (both inside and outside of Superannuation), Insurance, Centrelink and other discussion points to help you both understand the best course for you. It is important after all to be sure that your plan aligns with your goals, time horizon and risk tolerance. Reviewing all factors enables you both to make educated, informed decisions.


Written plan
At the end of the meeting, you’ll have the beginnings of a plan that outlines how much you wish to be saving each month, what those savings are for, where you would like them invested and why. You’ll have a strong grasp of where you are financially, where you want to go, and how you’re planning on getting there. It’s important to remember that you are the decision-maker and your planner is there to help guide you on your journey to reaching your goals.


You can count on being asked a lot of questions. In a good meeting, you can count on being the one doing most of the talking while being reminded that it’s your money, and your decision. Most importantly, you can count on leaving the meeting with a personalized outline designed specifically to help you reach your goals.

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Life Events That Require Financial Planning

Even positive experiences might necessitate some professional help.

Sometimes, even the best events in life – a birth, new job or dream relocation – require a financial plan. They might necessitate the need for more insurance coverage, a new budget or guidance from a financial advisor.

Here are 6 positive events that should inspire you to do some financial planning:


 

1. You retire.
Retirement is considered the pivotal financial moment in a person’s life. If you haven’t already worked with a financial planner to figure out your plans and budget, then now is the time. In fact, at Power2 we urge even clients in their 20s and 30s to start planning for this major life transition, to make sure they’re saving enough along the way, during their peak earning years. It’s also a good time to reflect on what you want out of the final third of life.


 

2. The opportunity to buy a Holiday Home / Rental Property.
Beach houses and holiday homes are a great annual escape from everyday life. Then, the landlord offers a sweet insider price you can’t refuse. Likewise a rental property can seem like a great idea, tax deductions and an investment you can visit and touch. While they can be a great investment for some, rentals and holiday houses, especially ones that require rental income to finance – can be a complicated long-term commitment. A Power2 financial planner, not a real estate agent, is the adviser to help you objectively consider this decision.


 

3. You got a pay rise.
Pay raises are typically small and incremental if they come at all, so getting a big raise is cause for celebration. They also mean it’s time to do some planning to determine how much you should be saving for the future. It might be time to consider bumping up your retirement savings through strategies such as Salary Sacrifice.


 

4. You just got an inheritance.
Baby boomers stand to inherit significant wealth in the coming years, and receiving lump sums also carries with it financial responsibility. It can raise questions about spending habits, charitable contributions, tax payments and a slew of other concerns. You might want to get help from a Power2 Financial professional as you figure out how to handle the money.


 

5. Wedding bells are ringing.
Marriage is often the start of a long journey with many major shared life events like children, travel, loans, business and eventually retirement. A good financial planner will take that journey with you, scouting ahead to be sure you take advantage of every opportunity and avoid life’s traps.


 

6. You’re expecting a new arrival in the family.
When the baby arrives, life inevitably gets more complicated. It could be worth it to fit in some financial planning alongside baby naming or stroller shopping. You might want to start planning around future debts such as housing, cars and schooling as well as take out additional life insurance policies.

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Your Checklist to Choosing a Financial Planner

The stakes are high when you open your finances to a planner, so don’t skimp on your homework.


Do your due diligence

Choosing the right Financial Planner is vitally important to your financial well-being. This is someone you will trust with your investments, which makes it a high-stakes decision. Do you know what qualifications to screen for or which questions to ask? The Financial Planning Association of Australia is a great place to start your search.

Power2 is an FPA Professional Practice and all planners are members and signatories to their code of conduct.


Review qualifications

How do you make sense of the alphabet soup in Financial Planner designations? Do your homework, and find out which titles, such as Certified Financial Planner, offer the kind of expertise you’re looking for. Many designations sound impressive, but they don’t require more than a couple of two-hour classes.

Power2’s Certified Financial Planner and Associates all hold university degrees along with post graduate Financial Planning studies.


Check the Planners history

You would hate to open up your finances to a Financial Planner you later learn has a history of skirting the law. Investors should check the Australian Securities and Investments Commission’s (ASIC) website to review an planner’s history as well as finding other helpful advice.

Power2’s experienced Financial Planning team are all proud to offer ethical client focused advice.


How is the Planner licensed

Is this planner qualified to give you financial advice and who holds their licence? Planners can hold their own financial services licence or they may be operating under a large financial institution. If you want to be sure that your adviser is providing you with advice tailored for you and not the interests of some faceless company ask the question!

Power2 holds its own Australian Financial Services Licence (AFSL) meaning we have no links to large financial institutions which can influence our advice.


Ask to see an example of a client report

If you were thinking of hiring a caterer, you’d try the food first, right? Well it also makes sense to see an example of a Financial Planner’s work before hiring him or her. Ask the planner to provide you with an example of a client’s report. To get a better understanding of his/her services, ask the planner to walk you through each line, explaining the rationale behind the asset mix and the results.

At Power2 we would welcome the opportunity to take you through the quality and depth of the advice you will receive.


Find out how the planner is paid

In a perfect world, the way your Financial Planner is compensated wouldn’t affect the quality of advice you receive. But since that’s not a reality, investors must understand how money motivates planners. Planners must put clients’ interests above their own and their recommendations must suit the client’s financial needs, objectives and unique circumstances. Commission payments to planners from third parties can complicate and confuse this relationship.

Power2 receives its fees from you and no one else. We discuss and agree on fees with you upfront and payment can be either directly from you or paid from your investment assets.


Determine if the planner can speak your language

“Organic growth”, “opportunity costs”, “Alpha and Beta funds”. Investment communication is riddled with confusing terms and complicated concepts. It’s your Financial Planner’s job to translate those ideas and terms into language that is both understandable and relevant to your situation. If an planner isn’t willing to break these terms down for you, you may need to keep searching for a better fit.

At Power2 we believe that education is one of the most important things we can offer. The more you know about your financial plan the better prepared you are to take control of your financial future.

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What is Financial Planning

Power2’s Financial Planning team in Mackay is led by Derek Fitzgerald. Over the last few years Derek has twice been selected as one of the top 50 financial advisers in Australian by Australian Financial Review Smart Investor magazine after taking part in their annual Master Class exam.

Derek has completed studies at Deakin University to become a Certified Financial Planner and is a Life Risk Specialist through the Australian Financial Planning Association. He also holds a Bachelor of Psychology from James Cook University and a Diploma in Personal Financial Planning from the University of Southern Queensland. Derek is also one of the Partners of the business.

Our Financial Planning Services encompass:

Retirement planning including:

  • Salary sacrifice
  • Account Based Pensions
  • Transition to retirement income streams
  • Centrelink and Social Security Planning
  • Self Managed Superannuation

Wealth accumulation including:

  • Borrowing to invest
  • Regular savings plans
  • Redundancy planning
  • Investment advice (including property)

Life insurances (inside & outside super) including:

  • Life cover
  • Total and Permanent Disability cover
  • Income protection
  • Trauma cover

Estate planning advice including:

  • Wills
  • Enduring Powers of Attorney
  • Disability and Testamentary Trusts
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What is the true value of financial advice?

It’s widely accepted that good financial advice offers clients a greater retirement lifestyle, improved personal security through effective insurance, better cash flow, the peace of mind of avoiding bad investments and greater discipline in sticking with good investments and budgets. Successful financial advice doesn’t just influence financial decisions though, it also influences client happiness, and it’s this underlying benefit which presents the true value of financial advice.

IOOF, in partnership with ‘effortless engagement’, took a closer look at these subtler benefits of financial advice in their white paper “The True Value Of Financial Advice” and uncovered….

Happier at home!
Respondents suggested that with ongoing financial advice there was greater harmony at home (one 2012 study found arguments about money were the strongest pointer to divorce of all disagreement types1) and lower levels of stress associated with purchasing decisions.

A perfect life?
One of the most compelling findings was that 22 per cent of people are more likely to feel they are living their ‘ideal life’ when they are backed by a successful financial plan and without the pressure or concerns surrounding money.

Get fit with financial advice!
The study also found that financial advice benefits extended beyond emotional happiness to clients’ physical health. The results were telling, with around 1 in 5 people who don’t receive financial advice reporting anxiety or disrupted sleep due to money concerns.

What else did the research show?
“The true value of Advice” paper showed that clients who receive ongoing financial planning advice experience:
• 13% greater levels of overall personal happiness.
• 21% overall increase in peace of mind.
• 17% increased level in confidence that their core goals will be achieved.
• 20% increased feeling of financial security.

One last point, Families come first
The research also found that family wellbeing was the top ranked priority, ahead of career, wealth and even personal health. In fact an overwhelming 83 per cent of clients consider it important for family members and close personal relationships to receive professional, ongoing advice.

If you would like a copy of IOOF White Paper ‘The true value of advice’ with the full results of their financial planning survey please contact our office.

1 Dew, J., Britt, S. and Huston, S. (2012), Examining the Relationship between Financial Issues and Divorce.

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