What exactly is financial planning……

“As featured in the June Edition of the Western Sydney Business Access magazine (WSBA)”

Prior to the Global Financial Crisis (or the GFC as it is affectionately now known), the financial planning industry held a somewhat precarious place in the financial services world. It was often on the receiving end of unfavourable media attention thanks to a small number of unscrupulous and often unregulated advisers who had the sole intention of preying on and ripping off unwitting people of their life savings .

With many Australians not really understanding what a financial planner did or what the financial planning process involved, people steered clear of those offering these much needed advice services, and opted for the typical aussie DIY approach to manage their financial affairs. In many cases, it was (and still remains) a “she’ll be right” attitude. However, does this approach provide someone with ‘peace of mind’?

Post GFC, during the aftermath of its destruction the financial planning industry was dragged into the spotlight as fingers were pointed. But in many cases the blame being laid at the feet of financial planners was misplaced. This was generally as a direct result of the lack of knowledge of what a good financial planner does and what impact financial planners actually had on the losses incurred by so many Australians as well as other investors around the world.

As is often the case in life, the fear of the unknown is what stops people from moving out of their comfort zone and this analogy can be applied to the financial planning process. Sitting down to identify your financial and lifestyle goals, then having a plan prepared which shows you how you can achieve these goals and then challenging yourself to trust this advice and make the changes identified are all factors which can take someone out of their comfort zone. With any ‘plan’, financial or non financial, the outcomes are never guaranteed and for many this fact leads them away from getting the advice they need.

The GFC however, has highlighted the need to obtain financial advice from professionals to reduce the risk of making the wrong choices when it comes to one’s financial affairs and since the GFC there have been a wave of reforms to make the financial planning industry more regulated and more transparent so as to give people both financial and legal protection as well as to build faith in the profession.

The Financial Planning Association of Australia (or FPA), the peak body governing and representing financial planners and the financial planning industry within Australia lists the definition of financial planning as; “Financial Planning is the process of developing strategies to help you manage your financial situation so that you can protect and build wealth, enjoy life and achieve financial security” . The FPA website also contains information as to what the financial planning process is as well as when you may need advice along with other invaluable information concerning the industry.

But what really is financial planning? Who are financial planners? And what is a financial plan? Quite simply, financial planning is about identifying what your financial and non financial goals are (B), taking stock of where you are now (A) and working out how you can go from A to B in a comfortable and secure way. Financial planners are the professionals who help you do this and a financial plan is the roadmap you get that outlines how all of this is going to happen. In essence, the financial planning process is all about ‘adding’ value to your financial situation that you otherwise could not have achieved without having received the advice.

That all seems very simple and straightforward, so why are many Australians still scared of the process? For most, it is a question of trust. Who do you trust to give you advice that in most cases is life changing? It’s a tough decision for an individual to make and they would sincerely hope that the person that they put this trust into takes this responsibility seriously and acts in their best interest at all times.

So how do you choose a financial planner? At a minimum, you should always choose a financial planner who is a member of the FPA and if possible is also a CFP. CFP stands for Certified Financial Planner and is a designation which indicates that this planner has undergone extensive formal training and maintains this level of expertise through regular ongoing training. It also means that this person is bound by the FPA’s Code of Conduct which covers many ethical, legal and professional requirements.

From this it is all about building a relationship with the financial planner. Without this relationship there can be no trust and a good financial planner will take the time to get to know you and your entire personal situation. Without doing this, it is virtually impossible for a financial planner to provide advice that is adequately tailored to your personal needs.

Hence why in many cases financial planners who are either your accountant or work within the accounting firm you use are well placed to provide the advice as they have this relationship with you already. But that is not to say that financial planners working on their own or within a financial planning firm are any less competent and it does really come down to the relationship and the level of trust an individual has with their financial planner of choice.

And what about the actual financial plan? What does it actually cover? In reality it covers a whole host of things. A good financial plan takes into account your entire financial and personal situation. It can cover retirement strategies, investment strategies, superannuation strategies, savings plans, budgeting and lending strategies just to name a few areas. It can be for you as an individual or it can be for your business.

And if you have a good financial planner, it will provide advice on the best personal insurance options available to you including income protection insurance, life and disablement insurance and trauma insurance. Because with any plan you have to protect against the unforseen and so insuring the sources of income that will provide the opportunity to achieve these financial and lifestyle goals is a must.

Finally, good financial planners see this financial plan as a ‘work in progress’. A set and forget approach to financial planning doesn’t work and once the process has started and the seeds have been planted it is a life long commitment from both sides. (Hence why the relationship between planner and client is vital to the success of the financial plan).

At a minimum your financial plan should be reviewed on a yearly basis to ensure it remains on track to achieving your goals. Things change and a good financial plan has the ability to be flexible to absorb those changes and allows your financial planner to make adjustments where needed to ensure your short and long terms goals are still achieved.

There are many examples out there of the benefits of engaging the services of a financial planner and going through the financial planning process. The FPA website has published a booklet with easy to read real life case studies which not only highlight the benefits of getting proper financial advice but also to help show the value that a good financial planner can provide to you.


Xero software makes maintaining records and compliance easy! Real time income and spending updates allow you and your accountant to commumicate effectively and keep on top of your accounts, providing a better understanding of your position and allowing greater flexibility. As it is hosted in the ‘cloud’ there is no need for complex installation processes or backing up your data on a CD or usb. Simply use your secure login to access your accounts from anywhere, anytime. For more information visit the Xero website or contact an accountant at EFS.

EFS Bulletin July


Since its inception, Elite Financial Solutions has always offered a broad range of Information Technology, Financial/Corporate, Business Development and other key services to meet your requirements in today’s rapidly changing business environment.
With this concept in mind, we are currently implementing an expansion of our IT services to incorporate online bookkeeping, ecommerce, and the continued expansion of our specialist activities. Therefore we are very pleased to announce the imminent launch of our new interactive web practice. 
Services available online will include finance calculators, specialist content and valuable taxation information.


One in six women and one in four men between the ages of 35 and 65* can expect to be off work for 6 months or more due to an accident or disability, according to our Financial Planner, Christine Hallowes.
However despite these alarming statistics, few Australians consider the financial ramifications of being out of work for an ongoing period of time – until it happens to them.
The Federal Budget contained a number of relatively minor amendments, with the main focus on restricting spending to bring the Budget back into surplus by 2012/13.
There were several announcements relating to superannuation, tax and pensions that could have an effect on your financial position.
If you think you may be affected and have questions, our financial planner Christine can provide more information about what action you need to take.
Before you launch into the process of setting up your own business, read through the suggestions below for some vital steps to consider:

Is it right for you?

It takes more than just a good idea to start a business.  Commitment and dedication are also important because getting your idea off the ground can often involve long hours and many sacrifices – well worth it if you are passionate about your business.
You need to have good business management skills to keep the business running effectively. This is especially true since, according to the Australian Bureau of Statistics, most new enterprises fail within their first five years of operation! 


Taxes are one of the most important issues facing small, growing businesses.  Business owners need to ensure that they are meeting all their responsibilities to the ATO – and also seizing every opportunity to reduce their taxes.

Remember important deadlines

We are all aware that the ATO requires individual tax returns to be lodged by a certain deadline.  Similarly, the ATO has deadlines for businesses to lodge activity statements, GST returns, FBT reports, PAYG withholding reports, superannuation and income tax returns.
On 1 July 2010 the Government amended Section 254T of the Corporations Act 2001.  Due to this change, Company Directors now have to satisfy each of the following three separate criteria before declaring to pay a dividend: