Financial planning 101 - Read everything

In this series of videos, I’m giving you my top 5 tips when working with financial professionals. Let’s go to tip 4, which is to read everything your financial professional gives you! You will receive a lot of documents throughout the financial planning process and it’s important to remember that each of those documents is there for a reason. They are designed to answer a lot of the questions about strategies and investments you might have. You may even be asked to sign off on them to confirm you’ve received them and understood what they say. When you’re interviewing with planners to choose who you want to manage your finances, you’ll also be given something called a Financial Services Guide. The moneysmart website explains that the Financial Services Guide is to tell you the services the planner offers, what fees they charge, and how you resolve complaints. You get the guide before you choose a planner, so you have the information up front to compare. The Statement of Advice given to you by your planner will set out what they’re recommending you should do. It should include details about your present position, looking at your financial position, your short- and long-term goals, and your appetite for risk. The document will also spell out how the planners’ particular strategy and selected products will achieve your short- and long-term goals, and any payments or benefits that will go to your planner as they implement and manage the appropriate strategy to suit your needs. Your financial plan should also be reviewed at least once every 12 months as your goals and perceptions may change. Any decisions to change the investment products or asset mix should be properly documented with a new Product Disclosure Statement for each new product. It’s really important that you don’t just sign documents that are put in front of you. Make sure you’ve read them, understand what they are saying, and agree with what they recommend, before you sign them. There shouldn’t be any problem with you going to your planner and asking them to explain any part of the documents they give you. You can do it more than once if you need to. Moneysmart has more information about the advice process. You’ll find a link in the comments section and check out my next video for tips on what financial professionals can and can’t do.