THE FINANCIAL ADVICE PROCESS

//THE FINANCIAL ADVICE PROCESS
THE FINANCIAL ADVICE PROCESS 2017-09-11T17:41:44+00:00

THE STEPS BEHIND THE ADVICE

A Financial Adviser’s first responsibility is to the client. When providing personal financial advice an Adviser must take into account the individual client’s circumstances and goals.

To provide financial product advice, a financial adviser must be licensed by the Australian Securities and Investments Commission (ASIC) or be authorised to represent a licence holder.

Your Financial Adviser must provide you with a Financial Services Guide. The main purpose of the Financial Services Guide (FSG) is to give you an overview of the financial services that are being offered. It contains important information about:

  • The services they offer you
  • How they are paid
  • Any potential conflict of interest that they may have
  • Details of their internal and external dispute resolution procedures and how you can access them

There are 6 steps your Adviser will use to help you work out what you may need to do now and in the future to reach your financial goals. These steps are:

  • Collecting your financial data and defining the scope of the engagement – Your Adviser should at this stage explain the process they will follow to find out your needs and make sure they can meet them.
  • Identifying your goals – you work together with the Adviser to identify your short and long term financial goals – this forms the foundation for developing your plan.
  • Assessing your Financial Situation – Your Adviser will get a good understanding of your current situation – your assets, liabilities, insurance coverage and investment or tax strategies.
  • Statement of Advice – Your Adviser will prepare, and provide you with a Statement of Advice (SoA) This will include recommendations for a suitable strategy, as well as products and services. To make sure that the advice is appropriate to you, advisers must make reasonable enquiries about your current financial situation and future needs. In the Statement of Advice they also need to tell you about any fees and or commissions and any associations they have with Financial Product Issuers or other parties which may have influenced the advice they give you.
  • Implementing your Financial Plan – Once you are satisfied and ready to proceed, you authorise your adviser to proceed and they will work to put your plan into action in accordance with your instructions.
  • Reviewing your plan on a regular basis – Your circumstances, lifestyle and financial goals can change. To ensure your plan stays up-to-date and relevant to your goals and circumstances it important to review it regularly to make sure your keep on track.
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