What a financial plan covers and what you can expect

Working towards your financial needs and objectives

A Statement of Advice (SoA) provides an outline of a financial adviser's recommendations to help you achieve your needs and objectives. The process often begins with a obligation free meeting with a financial adviser. They'll ask questions about your current situation and your financial goals. They'll then provide details of the fees and charges if you proceed with their advice.

Key areas your financial plan may cover 

The Statement of Advice may begin by detailing your current financial position, your needs and objectives, and your attitude to risk. You may also find your planner's reasons for giving the advice, possible risks and consequences of proceeding with the advice. It may also include an outline of why your planner believes the advice is in your best interests.

Where your Statement of Advice describes an alternative strategy, you may see why this was not ultimately recommended by your planner.

It should then detail the personalised advice developed specifically for you based on the information you provided.

Depending on your requirements and the information you have provided, your Statement of Advice may include:

• a review of your cashflow
• strategies to help you manage your debt
• a review of your super and suggestions on how to maximise it for the future
• a review of any estate planning needs
• an analysis of any personal insurance needs and recommendations about the most suitable policies for you
• a review of your share portfolio
• other investment considerations and recommendations.

Your needs and objectives

A list of your goals and objectives may include a snapshot of how and when they may be achieved. If any goals are unrealistic, this may also be addressed. Please note, the table below is for illustrative purposes only.

Your adviser may use charts as a visual comparison of the expected outcomes of your current financial strategy versus the one they recommend. You may also receive a summary of your estimated income, expenses, tax and overall cash flow for the next three years. This is to check if you’ll have sufficient cash to cover your living expenses.

A summary of the strategy 

The Statement of Advice should include details of how to implement each recommendation and who will have responsibility for taking action. For example, this could be your banker, accountant or your solicitor.

Peace of mind 

The most trustworthy financial advice is impartial financial advice. So, if there are any potential benefits for your adviser in recommending particular products, this should be clearly stated. Likewise if a product is related to a group they are licensed through. That way you can make an informed decision.

You should also find a summary of the fees and costs you’ll be charged for the Statement of Advice and any ongoing advice.

What’s next

Paying off your home loan is just one example of how your circumstances, lifestyle and financial goals continue to change.

A regular review of your financial plan by your planner may assist in taking account of any relevant developments in legislation or taxation and making the most of new opportunities.