THE DOVER GUIDE TO THE FINANCIAL PLANNING PROCESS
The financial planning process is a never ending cycle designed to ensure your clients get the best possible service and are doing everything possible to maximize their wealth and minimize their risk.
The key elements to the financial planning process are:
- making reasonable inquiries about your client's personal circumstances, and documenting that you have done this
- carefully considering your recommendations, and the subject matter of your advice;
- making sure your advice is appropriate for your client and is expressed in a clear and concise style in a statement of advice that complies with all relevant Corporations Act requirements and effectively informs your client of his or her options; and
- appropriate and timely follow up of all relevant matters.
The financial planning process must be pitched to the circumstances of your client, having regard to age, gender, occupation, income levels, wealth levels and education, and your advice must be reasonable and suitable to your client. Your client's financial sophistication is an important variable in the financial planning process. The explanatory memorandum for the FSRA included a statement that:
"The level of inquiry and analysis required will vary from situation to situation and will depend on the advice requested by the client. The providing entity need only obtain and and analyse sufficient information about the client to provide the advice requested or profferred. So, for example, a comprehensive analysis of the client's full financial position may not be necessary where the client has sought personal advice on a specific product."
"The level of inquiry and analysis required will vary from situation to situation and will depend on the advice requested by the client. The providing entity need only obtain and and analyse sufficient information about the client to provide the advice requested or profferred. So, for example, a comprehensive analysis of the client's full financial position may not be necessary where the client has sought personal advice on a specific product."
A complete financial planning process considers taxation, superannuation, business structures, insurance, investments, estate planning and succession planning, properly pitched to suit the circumstances and sophistication of your client.
The Dover Guide to the Financial Planning Process helps make sure you cover all bases when advising your clients and can be downloaded here:
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