Aitken Financial Planning
Aitken Partners recommends the service of Blue Sky Financial Planning for all your financial planning advice. Please ask for a referral from your Aitken Partners' contact.
Blue Sky Financial Planning
To help you better understand our services and how you can get the most out of them we thought you might benefit from an overview of financial planning and the processes that we will undertake with you. It is important that you understand these issues before retaining us. These issues will form part of our agreement with you to provide our service.
WHAT IS FINANCIAL PLANNING?
“Financial Planning” is the process of providing advice and assistance to clients for the purpose of determining whether and how clients can meet their financial needs and life goals through the proper management of financial resources.
The Financial Planning process typically includes but is not limited to the following elements:
- establishing and defining the client/planner relationship,
- gathering client data,
- establishment of client’s goals,
- analysing and evaluating the client’s financial status including problem identification,
- developing and presenting recommendations and/or alternatives for negotiation with the client,
- implementing the agreed-upon recommendations, and
- reviewing and updating the financial plan as required.
A client may be an individual, a family unit or a legal entity.
Financial Planning includes the basic areas of financial position analysis, investment planning (portfolio design and management, superannuation, borrowings, taxation and legal structures), risk management and insurance, retirement planning and estate planning. Education funding, charitable planning and business succession planning may also be covered as required.
The financial planning process can be applied to meet a client’s needs on
- a full range of client goals on a comprehensive basis,
- a sub-set of the client’s goals on a more limited basis, or
- a specific client goal/need on a specialised basis.
TAILORING AND CUSTOMISING ADVICE THAT IS REQUESTED BY THE CLIENT
The definition of financial planning acknowledges that the process can result in you receiving a complete strategy to meet all of your financial and life style needs and goals or a strategy that meets only part of your overall needs because you
a. do not provide us with all the information we need, or
b. ask us to look at just one part of your financial life.
WHAT HAPPENS IF YOU DO NOT PROVIDE US WITH ALL THE NECESSARY INFORMATION?
Whether we are providing you with a complete plan advice on meeting one or several objectives, it is vital that you give us as much accurate information as you can. Without that information our advice may be inappropriate and in such case you are not able to rely on it.
If we believe that the information we receive is incomplete or inaccurate, we are required by law to warn you that the advice may not be appropriate. What happens if you want us to look at only part of your financial life?
Your financial situation is like a highly refined engine – it is not possible to tinker with one part of the engine without affecting the other parts and maybe the overall performance of the engine.
If you ask us for advice on a limited aspect of your financial situation we may need to have information about your whole financial position before being able to help. As we said earlier, if we only know about part of the picture we will not be liable for the appropriateness of the advice and will have to warn you as we are required to do by law.
HOW WILL YOU KNOW HOW MUCH INFORMATION TO PROVIDE?
That’s easy – we need to know everything.
Or at least everything that bears on your objectives, your financial situation and needs, your relevant personal circumstances, the purpose for which you want the advice, and your desired results. We have developed a questionnaire that will help to guide you through the process. Your relevant personal circumstances include but are not limited to:
- Your future goals and objectives
- Need for regular income (eg retirement income)
- Need for capital growth
- Desire to minimise fees and costs
- Tolerance of the risk of capital loss
- Existing investment portfolio
- Need to be able to readily cash-in the investments
- Capacity to service any loan provided in relation to a financial product
- Tax position, social security entitlements, family commitments, employment security and expected retirement age.
HOW DOES THE PROCESS WORK?
#1 Together we will establish precisely what you want from us and reach agreement on the Terms of Engagement – the contract relating to our services.
#2 You will provide us with all necessary information to properly provide our service.
#3 We will analyse and evaluate your current financial status (including any problems).
#4 We will develop and present our recommendations.
#5 We will discuss these recommendations with you in detail, including any changes you would like.
#6 You will then make your decisions and advise us of these.
#7 We will implement your decisions including helping you to buy or sell any investment products.
#8 Unless you direct us to do otherwise, we will monitor your financial situation in accordance with our regular review procedures and provide updated advice as necessary.
ONGOING REVIEW
Monitoring your financial plan is a vital part of maintaining the health of your plan.
That monitoring can consist of
ad hoc advice regarding a particular investment if the appropriateness of that investment changes;
regular performance reviews of your investments to ensure reasonable performance levels within the selected asset category, and
regular review of your personal circumstances to ensure the continuing relevance of the assumptions you instructed us to make in preparing the strategies associated with your financial plan.
The level of review will be specific to your specified objectives and both of us will need to be vigilant to ensure that the advice does not damage the strategies of your complete plan or have a detrimental affect on the financial well-being of you or your family.
Although we will help you to consider these matters at the appropriate time, you bear the prime responsibility for advising us of any change to your circumstances and of the potential for any advice we provide at the time of a review to be inappropriate to the general financial well-being of you or your family.
OUR AUTHORISED INVESTMENTS
In providing you with suitable recommendations about investment products it is necessary for us to have researched these products in order to assess them. We must also regularly review and renew that research.
Given the vast range of products on the market it is simply not possible to research and regularly monitor all available investment products.
We have established a list of authorised investments, being products that we have researched and continue to monitor and that we are confident in recommending to the right client.
We can only recommend products on that list. If you want us to arrange for you the purchase of a product not on our list we will require a release confirming that we have not recommended the product and have not provided financial product advice in regard to it.
WHAT IS RISK ANALYSIS?
Risk analysis is the process of determining what type of risks you want to take with your money.
Terms like ‘high risk’ are very subjective. What is ‘high risk’ to a retired person might be low risk to a twenty-something working in the finance sector. We therefore need to be more scientific and objective about your risk tolerance.
Risk analysis is designed to enable us to select the right mix of investments to achieve a specific balance of risk and return for you. Through the process we will be able to establish your risk profile which will form one of the bases of our product recommendations.
THE INHERENT RISKS IN INVESTING
It is important to understand that there will always be risks when it comes to investing your money.
The goal is to effectively manage that risk.
It is often said of investing that the higher the risk, the higher the return. While this is not an absolute, it is true to say in general that low risk investments like bank accounts also provide the lowest returns.
If you want, therefore, to increase your possible returns you have to be prepared to invest your money where the risks are greater.
No one can ever guarantee beyond any doubt that the value of your investments will never decrease.
Look at all the major corporate failures both here in Australia and overseas in the last 10 years.
What we can do is put processes in place to manage the risks.
As your financial planner we can help to control that process. We can provide to you the information you need to assess the situation. We can help you to understand the relevant issues and make informed decisions about your investments.
We cannot control the sharemarket, government regulation, the economy, the laws on tax and social security or any of the myriad possible changes to your personal life that could affect the appropriates or value of your financial situation.
