Understanding Financial Planning: A Complete Guide

Ever feel like your finances are running the show, instead of the other way around? You’re certainly not alone.

For many Australians, financial planning can sound as daunting as assembling IKEA furniture without instructions - completely overwhelming.

But here’s the good news: financial planning isn’t just for CEOs or “numbers people.” It’s for anyone who dreams of feeling in control, making confident decisions, and enjoying more of what life has to offer—today and tomorrow.

Whether you want to finally master your budget, invest for the future, or simply stop worrying about life’s “what ifs,” understanding financial planning is your ticket to turning uncertainty into clarity.

Ready to discover how a little structure can open up a whole lot of freedom? Let’s get started.

Table of Contents

What is Financial Planning?

What does Financial Planning involve?

The different types of Financial Professionals

Do I need a Financial Planner? Can I manage investments on my own?

What is the process of Financial Planning?

Can I just get a Financial Plan without having to engage in the yearly ongoing service?

Benefits of Financial Planning

Who can benefit from Financial Planning

How to choose a Financial Adviser

Challenges or Reasons Financial Planning Might Not Be Beneficial

Steps to commence your financial journey

What is Financial Planning?

Financial Planning is a comprehensive and ongoing process that involves gaining a deep understanding of what truly matters to you in life, identifying both your personal and financial priorities, and setting well-defined, actionable goals that reflect those core values.

What does Financial Planning involve?

This involves taking a detailed inventory of your current financial resources, including your income, expenses, assets, and liabilities, and evaluating how these can be leveraged to support your aspirations.

The next step is developing a strategic plan that not only aligns with your values but also positions you to attain your long-term objectives. Such a plan introduces a sense of order and discipline into your financial life, ensuring that every action you take is efficient, suitable for your circumstances, and congruent with the outcomes you desire.

It bridges the gap between where you are now and where you want to be, creating a roadmap that guides your financial decisions and actions in a coherent and purposeful manner.

Financial planning covers various aspects of personal finance, including budgeting, saving, investing, insurance, retirement planning, tax planning, estate planning and intergenerational wealth considerations.

So, what exactly does a financial planner do? Here's a breakdown of key components in financial planning:

1. Setting Financial Goals:

• Identifying short-term and long-term financial objectives.
  
  
• Examples include buying a home, funding education, saving for retirement, or starting a business.

2. Assessing Current Financial Situation:

• Reviewing income, expenses, assets, and liabilities.
  
  
• Understanding spending habits and financial behaviours.

3. Creating a Budget:

• Developing a realistic budget that allocates income to expenses, savings, and investments. This can involve varying levels of detail, depending on what works best for you.
  
  
• Monitoring and adjusting the budget as needed. Are you spending more or less than you thought you’d need?
  
  
• Budgeting is not necessarily about being strict about your spending; rather it’s about understanding where your money is going, what’s left over and what is really costs to fund your lifestyle. This builds a strong foundation for building strategy and understanding your longer-term financial capabilities, giving you the opportunity to make smaller changes now rather than material sacrifices later in life.

4. Saving and Investing:

• Establishing an emergency fund for unexpected expenses. Covering these risks means you can be more assertive with your broader strategy, such as taking on debt and/or investing.
  
  
• Investing based on risk tolerance, time horizon and financial goals.

5. Insurance and Risk Planning:

• Evaluating the need for life insurance, disability insurance, income protection and trauma cover.
  
  
• Ensuring adequate coverage to protect the family against unforeseen events, considering your available budget.
  
  
• Understanding that ‘Risk’ comes in many forms. In the short term, it could be employment risk and market volatility. Over the long term, it could be the impact inflation has on the real value of your wealth, or the risk of running out of money in retirement (both of which can be managed through early and careful planning).

6. Retirement Planning:

• Calculating how much is needed for retirement and putting a plan in place as soon as possible. It’s an objective that hopefully spans decades, filled with travel, investing in our health, seeing our families grow through 2nd, 3rd and sometimes 4th generations, recreation and doing new things. It takes a lot of work and time to build for this.
  
  
• Contributing to retirement accounts such as superannuation, annuities or other tax deferral strategies.

7. Tax Planning:

• Build your activity and strategies around tax optimisation. The less tax you pay, the more financial capital available to achieve your objectives.
  
  
• Considering tax at all levels of your financial position: salary, business profits, choice of investments, portfolio rebalancing, structuring and ownership, planned future sale, role of debt, etc.

8. Estate Planning:

• Creating a plan for the distribution of assets after death.
  
  
• Establishing wills, trusts, and powers of attorney.
  
  
• Consideration for the role superannuation, Life insurance and investment bonds may play in your achieving the best outcomes for your loved ones, noting these may not automatically make up part of your Estate.
  
  

Speak with a Financial Adviser

The different types of Financial Professionals

With so many industry titles—Financial Adviser, Investment Adviser, and more—understanding who does what is the first step in feeling empowered and supported.

Some common terms you might hear are:

• Investment Adviser

• Financial Planner

• Financial Adviser

• Certified Financial Planner

The main differences between the above are:

Investment Adviser: Provides advice on specific financial products. This role often focuses on investment advice and perhaps insurance products only. While Investment Advisers assess your risk tolerance, investment objectives, they do not consider your broader objectives, when determining their recommendations. 

Financial Planner: A qualified professional, who helps individuals and families create comprehensive financial plans. They work closely with you to understand your tolerance to risk, your experience and financial goals. They analyse your current financial situation vs. your goals and provide recommendations to help you achieve them.

The terms Financial Planner, Certified Financial Planner, and Financial Adviser generally fall under the same category.

How to choose the right professional.

Do I need a Financial Planner? Can I manage investments on my own?

Anyone can invest on their own, just like anyone can sing. But not everyone can sing well. 

Choosing to manage your investments yourself can feel empowering! You’re in the driver’s seat, making every decision directly. You feel confident and you are excited for the outcomes. 

Yet, the sheer volume of information, market shifts, and changing regulations can make it difficult to know if you’re on the right track. A lack of professional understanding can have devastating effects on your investments, superannuation and overall financial position.

Seeking independent financial advice can help cut through the noise, giving you a clear, unbiased view of your options. It ensures that all recommendations are focused on your goals—no hidden agendas, just clarity and transparency.

Let's look at the breakdown of managing your investments on your own, verses with a Financial Adviser. 

1. Expertise and Knowledge

Investing on your own

Knowledge Requirement: Managing investments independently requires a solid understanding of financial markets, investment products, and economic trends.

Research and Analysis: Investors must conduct thorough research, analyse market movements, and stay updated with news to make informed decisions.

Investing with a Financial Adviser

Professional Guidance: Financial planners bring extensive knowledge and expertise in investment strategies, asset allocation, and risk management.

Personalized Advice: Advisers assess your financial situation, risk tolerance, and goals to tailor investment strategies that align with your objectives and time horizon. They work with you to review the portfolio and ensure it continues to help you work towards goals or meet your objectives.    

2. Strategic Planning and Goal Alignment

Investing on your own

Personal Responsibility: Investors must develop and implement their investment strategies. Investors may need to seek or engage external validation or professional guidance.

Goal Setting: Setting realistic financial goals and creating a structured plan for achieving them requires discipline and clarity.

Investing with a Financial Adviser

Comprehensive Financial Planning: Advisers integrate investment strategies into a broader financial plan that considers your overall financial situation, including retirement planning, tax implications, and estate planning.

Long-term Perspective: Advisers help you stay focused on long-term goals amidst market volatility and short-term fluctuations.

3. Risk Management and Diversification

Investing on your own

Risk Exposure: Without professional guidance, investors need to ensure they do not overlook the importance of diversification and risk management strategies.

Emotional Decision-making: Investors need to ensure emotional reactions to market movements do not lead to impulsive investment decisions that may not align with their long-term goals.

Investing with a Financial Adviser

Risk Assessment: Advisers assess your risk tolerance and design portfolios that balance risk and return based on your individual preferences. They can also be a trusted sounding board to help ensure portfolio decisions are made prudently, and without emotional bias.

Diversification Strategies: Advisers utilise diversification across asset classes and geographic regions to mitigate risk and optimize portfolio performance.

4. Monitoring and Adjustments

Investing on your own

Self-monitoring: Investors are solely responsible for monitoring portfolio performance, rebalancing assets, and adjusting strategies as needed.

Time Commitment: Managing investments independently requires ongoing time commitment for research and portfolio management.

Investing with a Financial Adviser

Proactive Management: Advisers continuously monitor your portfolio, making adjustments based on market conditions, economic trends, and changes in your financial situation.

Regular Reviews: Scheduled portfolio reviews and performance evaluations ensure your investments remain aligned with your evolving goals and risk tolerance, and respond to extraneous influences that may present opportunities, or threats that should be addressed.

What is the process of Financial Planning?

Whenever you engage with a financial adviser, you can expect a structured and collaborative process designed to get a complete picture of your unique circumstances. Advisers take the time to understand your current financial position, priorities, and aspirations—drawing out the details that matter most to you. This careful discovery forms the foundation for a tailored financial plan, developed to align with your personal goals and navigate life’s complexities with confidence.

As your situation and the world around you change, your adviser is by your side, providing ongoing support and proactive advice to help keep your financial strategy on track.

1. Consultation

The first step will be a free, 30-minute Initial Consultation with an Adviser. During this phone call, a discussion will be had around your current financial position, your goals, and aspirations. Advisers at Strategy First will determine whether we are a right fit for your needs, and if not, will point you in the right direction to find a solution that works best for you. 

2. Discovery

During the Discovery Process, you will begin to gather information about your current financial position, spending habits, debts, goals for the future, and anything that makes up your complete financial situation. You will be provided with documents to collect all this information which you will need to return to your Adviser. Once they have reviewed the information, a Discovery Meeting will be booked to go over everything you have provided. This meeting usually takes 1 1/2 hours to complete.

3. Financial Plan

Once you have signed off to engage our services, we will begin preparing a Financial Plan. This is a document that covers your current financial situation and includes our recommendations on what changes need to be made to ensure that you are in a better financial position. Once we have sent you the document, we will meet to go over everything we have recommended in detail and explain to you why we have recommended this (and how it improves your financial position). When you are ready to proceed, you will sign the authority within the Financial Plan, which allows us to implement the recommendations we have made. We will collaborate with you to get this done in a timely manner. 

4. Ongoing Services 

Financial advice is paramount to ensuring your strategies are working towards your goals, and not against them. Ongoing engagement ensures that your adviser is regularly reviewing your portfolio to make sure that your recommendations are still in line with your needs. 

Can I just get a Financial Plan without having to engage in the yearly ongoing service?

You can, but it is not recommended by most advisers due to the fact that markets, financial positions, and goals change. Without a regular review of your portfolio, you can't be sure that your current recommendations are up to date years after you receive your advice. Engaging in an ongoing service gives you clarity and peace of mind that your portfolio is working with you, and not against you. It takes the burden off your shoulders, and onto the shoulders of your adviser. 

Benefits of Financial Planning:

1. Goal Achievement

   Financial planning helps individuals and families articulate their financial goals and develop a roadmap to achieve them. Clarity and direction allow positive action and implementation, not just intention.

   
   

2. Financial Security

   It provides a sense of security by creating a safety net for emergencies, ensuring proper insurance coverage and planning for retirement.

3. Wealth Accumulation

   Through systematic saving and investing, financial planning contributes to wealth accumulation over time.

4. Risk Management

   It helps in identifying and managing financial risks through appropriate insurance coverage, diversified investments and investment strategies that are specifically aligned with different objectives and timeframes.

5. Tax Efficiency

   Strategic tax planning can minimize tax liabilities and maximize after-tax returns on investments.

6. Confidence and Peace of Mind

   Having a well-thought-out financial plan gives individuals confidence and peace of mind, knowing that they are on track to meet their financial goals. It promotes Financial Wellbeing, which is a huge contributor to our quality of life.
   

   
   

Who can benefit from Financial Planning

Financial planning can benefit a wide range of individuals and households, regardless of their financial status or life stage. Here are some groups of people who can particularly benefit from engaging in financial planning:

• High-Income Professionals

• Individuals Nearing Retirement

• Business Owners

• Individuals Experiencing Life Transitions

• Retirees

• Individuals Seeking Financial Independence

• Those Looking to Transfer Wealth

• Those Planning for Major Expenses

• Young Professionals and Graduates

• Families

• Couples Planning for Marriage

Do I need Financial Advice? (who can benefit from Financial Planning)

How to choose a Financial Adviser

As of March 2025, there are 15,558 financial advisers registered with the Australian Securities and Investments Commission (ASIC) in Australia. With so many options, how are you supposed to decide on who to partner with?

The type of adviser you decide to partner with is critical to ensuring a successful financial future. 

Things to consider when choosing a Financial Adviser

Importance of Independence

• Independent advisers aren’t tied to specific products or institutions — providing unbiased, tailored recommendations.

• Independence ensures transparency, avoids conflicts of interest, and builds trust.

Tip: Seek advisers who meet the Corporations Law definition of Independent.

Choosing a Financial Adviser: The Importance of Independent Advice

Qualifications & Credentials

• Verify formal education (undergraduate and postgraduate) and industry accreditations.

• Look for memberships in reputable bodies (e.g., CFP, FAAA, SMSF Association).

• Check licenses and qualifications on the Financial Adviser Register (Moneysmart.gov.au).

Tip: Ask about experience in areas important to you (e.g., wealth, super, retirement, estate planning).

Specialisation & Expertise

• Choose advisers with expertise relevant to your goals (retirement, wealth management, succession, superannuation).

• Consider advisers offering holistic advice for all aspects of your financial wellbeing.

Tip: Ask about their track record, success stories, and client testimonials.

Fee Structure & Transparency

• Understand how they are paid — fee-for-service promotes unbiased advice.

• Avoid advisers with product commissions or asset-based fees unless fully transparent.

Tip: Request a full fee breakdown and disclose any conflicts of interest.

Personalised Approach, Communication & Trust

• Adviser should understand your goals, circumstances, and risk tolerance.

• Clear, prompt communication and regular progress updates are essential.

• Trust and comfort in the relationship are key to long-term success.

Tip: Use an initial consultation to assess listening skills, communication style, and fit.

Challenges or Reasons Financial Planning Might Not Be Beneficial:

1. Lack of Commitment: Financial planning requires commitment and discipline. If individuals do not stick to the plan, it may not yield the desired results.
   
   
2. Incomplete Information: If the financial plan is based on incomplete or inaccurate information, it may lead to flawed decisions, ineffective strategies, lost opportunities or unintended future consequences.
   
   
3. Unrealistic Expectations: Setting unrealistic financial goals or expecting quick results can lead to frustration and dissatisfaction with the financial planning process. The risk is that you stop doing the right things and deviate from your plan, often leading to further setbacks and objectives not achieved. Discipline is crucial.
   
   
4. External Factors: Economic downturns, market fluctuations, or unexpected life events can impact the effectiveness of a financial plan, requiring adjustments along the way. If you do not constantly revise your strategy, there is a chance you’re no longer going in the right direction. Further, if you prefer to structure your decisions around predicting or reacting to external factors (fluctuating share markets, for example), you will find this is not congruent with a well thought out and structured strategy where you focus on what you can control.
   
   
5. Poor Implementation: Even with a solid plan, poor implementation can hinder success. Failure to execute the planned actions or adjustments can undermine the benefits of financial planning. Busy people often struggle with this component if trying to do it themselves, either due to time constraints or not knowing the best way to put things in place.

In summary, while financial planning offers numerous benefits, its effectiveness depends on factors such as commitment, acknowledging that your financial journey is unique, accurate information, realistic goal setting, adaptability to external factors and proper implementation.

Engaging a Financial Adviser with your planning needs is not about applying restrictions and rigidity to your life and how you interact with money. It is about providing guidance, leveraging from our experience and building some deliberate structure to provide you with more freedom to live your life.

It is for these reasons that partnering with a high quality and Independent Financial Adviser will give you the greatest chance of success, bringing peace of mind and financial wellbeing.

If you are still asking yourself "is a financial advisor worth it?" - the best way to find out is to speak with an adviser, break down your current financial situation, and see how they can help you. 

Steps to commence your financial journey

Financial planning is not exclusive to individuals with a certain level of income or wealth – it is beneficial for everyone, regardless of their current financial situation. Financial planning can help you manage your resources more effectively and work towards your financial goals.

Here are some considerations to help you commence the financial planning journey.

• Take stock of your current income, expenses, assets, and liabilities

• Identify your short, medium and long-term financial goals. 

• Create a budget to track your income and expenses. 

• Having some savings set aside for emergencies or unexpected expenses 

• Start small by setting achievable goals

• Prioritise debt repayment

• Use online tools, apps, and educational materials 

• Speak with a Financial Planner

• Regularly review your goals and values