What is a financial planner?

General advice 20 October 2021

Major life transitions might have a negative impact on our personal finances. Perhaps you're approaching retirement age or have received a windfall and are considering how to invest it wisely. So, if you need some additional help with your finances, you might want to go to a financial planner. What are they, exactly, and what do they do?

Our handy guide explains everything you need to know to help you decide if a financial planner is the right fit for you.

What is a financial planner?

A financial planner is a lot like a financial adviser - both have the expertise to support you with big financial decisions. But rather than help you with one-off tasks such as comparing insurance plans, a financial planner's services cover the long-term. They help people build roadmaps to achieve a healthy financial life.

It's common to see financial advisers that also offer financial planning services. This can seem confusing at first, but knowing what a financial planner does can help you determine if they're the right expert for your needs.

For instance, a financial adviser can help with short-term transactional tasks such as helping you choose a suitable pension product. Working with a financial planner is more of an ongoing relationship that can help you prepare for your ideal future.

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What does a financial planner do?

Now that you know what a financial planner is, what do they do? Think of them as your financial personal trainer. They look at your current financial fitness today and build a roadmap to help you realise your goals.

When you start working with a financial planner, the first step in your fitness journey means understanding who you are and what you want out of life. They'll usually ask you about:

  • Your personal goals: what you want to achieve in the short, medium and long-term
  • Your current position: a bird's eye view of your income, expenditure, assets and debts
  • Your financial risk tolerance: how much you're willing to lose in your investments

The next step involves helping you form a sound financial plan to realise your goals. This often involves helping you:

  • Determine your overall financial goals
  • Formulate a plan to achieve those goals
  • Put your unique plan into action
  • Review your progress
  • Stay on track with annual reviews

How a financial planner can help you

Everyone's goals are different and a financial planner will work with you on an individual level to support your needs. If you're comfortable managing your own finances and investments, a financial adviser may be a better fit if you just need one-off advice.

Financial planning could benefit you if you've experienced a big life change such as a divorce or sudden illness. These negative events can throw your finances out of balance. On the other hand, a promotion or marriage can also mean an influx of extra income. No matter your circumstances, a financial planner's job is to ensure that you can weather any storm and invest in a more comfortable future.

Many people work with financial planners to help them:

  • Managing self-employment finances
  • Form a financial plan to support their family's future
  • Find peace of mind that an expert can spot potential pitfalls
  • Save time spent managing finances and researching tax legislation
  • Make informed decisions with clear and impartial advice
  • Minimise or avoid hefty inheritance tax liability on your estate
  • Find tax-efficient ways to save for retirement and other goals
  • Set up trusts to help loved ones
  • Manage their investment portfolio

If any of these reasons hit home, it may be time to consider speaking to a financial planner.

How much does financial planning cost?

General advice or guidance can help you break down complex topics such as investing or pension types but if you want personalised recommendations on your unique situation, you'll need to pay for it. This cost will vary depending on where you live and your circumstances. You can usually expect either a one-off or ongoing fee in addition to the cost for annual reviews.

If the thought of ongoing fees makes you feel uneasy, remember that a financial planner's job is to help you get the most return from your money. They should always be helping you save more money than their fees so try to keep a long-term view of their benefits.

Man with headphones in looking at phone smiling

When do you need a financial planner?

Financial planning isn't right for everyone but if the following circumstances sound familiar, it may be time to consider working with a professional:

  • You don't have the time or confidence to manage your finances and/or investments
  • Your finances are complex and/or you have dependents
  • You think your estate may be liable for inheritance tax
  • You want to protect your dependents or partner after you pass
  • You'd like to save for the future and still enjoy today

A free, no-obligation consultation with a financial planner could help you gain perspective and discover better ways to manage your finances.

Connect with an expert

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And it works in three easy steps:

  1. Tell us what financial matter you need help with
  2. We'll match you with a local financial planner near you
  3. Book your free consultation

If you're still undecided about whether a financial planner could be right for you, our handy financial planning vs financial advice guide can help.

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