Author: Greg Taylor

Business Finance: Financial Plan

Have you got a financial plan? Our CFO Greg Taylor tells a great story to show the importance of having one. He says it is important to get expert advice and that new financial planning laws will benefit consumers. 

I read a story recently which brought home the importance of financial planning. A 1953 survey of graduates at Yale University showed that only three per cent had written a financial plan. Twenty years later, the assets of the three per cent who had written a financial plan were worth more than the combined assets of the other 97 per cent of their colleagues who hadn’t written a plan.

With less people eligible for pensions it is more important than ever that we plan to make sure our savings last longer than our retirement. Hopefully it will be quite a few years before you give up business and say farewell to this world. Just putting your money in the bank (or building society) is usually not enough these days. Life is not that simple. Check your super statement for your estimated benefit and see if it is anywhere near your current income or a figure you could live on.

A financial plan helps you put measures in place to make sure you have the money to afford the lifestyle you want to live at each stage of your life. As well as being essential to ensure you have money to live on, working out your financial goals or retirement lifestyle can be an important motivator.

Financial planning is complex and no two plans are the same. Your financial plan will change as your life stage or circumstances change. There are ever changing regulations too. That is why it is important to get some expert advice.

Get advice from a properly qualified person. New laws were introduced last year that become compulsory on 1 July 2013. Under the laws financial planners can no longer be paid a commission by product providers. Your financial planner must send you an annual fee statement every year.

As with any service, it pays to shop around. Make sure your planner holds an Australian Financial Services License.

At The Greater Building Society we offer financial planning services with our partner Bridges. Right now we are offering people the chance to win a $5,000 investment. All you have to do is have a FREE, no-obligation financial planning consultation, booked through The Greater, before March 31, 2013. You don’t have to be a customer of The Greater. 

Next week: the steps a financial planner should go through.

This post is adapted from Greg Taylor’s weekly Business Finance Column in the Newcastle Post newspaper.

Please ask any questions about financial planning or make a comment below.