What does a financial planner do?

A financial planner or adviser is a qualified professional who helps clients set money goals and work towards achieving them.

People see planners for many reasons. Some people want help with a one-off issue – like managing an inheritance – while others see one more regularly for advice on their future plans. Planners’ clients are often in their pre-retirement or retirement years, when they may need a bit more advice around superannuation, asset management and estate planning.

While some planners specialise in certain areas, such as taxation or retirement planning, others focus on a wide variety of financial matters.

How to find a qualified financial planner

To be recognised as a professional who can provide advice on things like investments, superannuation and insurance, a financial planner now has to clear a number of hurdles. For example, they must have a recognised tertiary degree (or equivalent), pass an exam and undergo ethics training.

Financial planners who have met those requirements are listed on the Financial Advisers Register, where you can search for a qualified adviser by name or by typing in your postcode.

People also find financial planners by asking friends, family or colleagues for referrals. Don’t forget to check the planner’s registration details though.

What happens at the first meeting?

When you meet a financial planner for the first time, they should spend some time getting to know you and your financial situation. They may ask about your debt, assets and future plans.

Next, they will probably talk about what they can offer, how much they would charge for financial advice and what they would need from you (such as permissions) to implement the advice. For example, if you choose to get an adviser to manage your investments, they may need access to your investment accounts.

Remember, it’s up to you to decide whether you’d like an ongoing relationship with the planner or their help with a more contained matter.

How much does it cost to see a financial planner?

Research from independent data business Adviser Ratings shows the average financial planner charges each client about $3500 a year for their services.

In the past few years, the same research shows, this cost has risen significantly, in part due to many advisers in the industry either retiring or leaving for other jobs, increasing demand for those remaining.Alternatives to financial planning

If you can’t afford a financial planner or wish to go in another direction, there are several options:

• Superannuation funds can provide limited advice in relation to your super over the phone or email.
• For retirement planning, including how much income you may get from super and the age pension, MoneySmart has a calculator that works out how much money you’ll receive at regular intervals.
• Robo-advice tools, which use algorithms to invest money, are another alternative. These robo-advisers may use a wizard to ask about your objectives, then invest money on your behalf.
• There are several free apps for creating and maintaining budgets, some of which can be linked to bank accounts to track spending and saving.