Just as the previous chapter outlines what you should be working with your financial planner on, there are also several things that are outside of the financial planners ‘swimming lane’ that should always be worked through with the relevant professional.
A good financial planner should work with not only your other financial consultants but also any business advisors (if you run your own business), lawyers and other professionals you need to surround yourself with as your investment portfolio grows, diversifies and becomes more complex.
There are certain areas that although a financial planner can be involved in the process, they should leave this or recommend this to other qualified professionals.
Sourced from the Australian Government’s Money Smart website, a financial adviser can give you general financial advice. This type of advice doesn't take into account your personal situation or goals, or how it might affect you personally.
A financial adviser can also give personal financial advice. This advice is tailored to your financial situation and goals and is in your best interests. The advice can include:
So, what shouldn’t a financial planner do?
Your financial planner should not provide accounting advice. No one should be offering you accounting advice, except for your accountant. This includes tax advice, lodging tax returns, setting up arrangements with the ATO and working with you to set up trust accounts, legal entities etc.
You need to ensure that you are getting a sign off from your accountant on all these matters and many more. Remember, they are the gatekeepers to much of the activity that happens with your accounts.
Stay away from getting legal advice from anyone other than a lawyer. This goes without saying that anything legal in nature MUST be attended to by a registered, licensed lawyer. Although your accountant or financial planner may be able to set things up or work with you on matters, much of the time a lawyer must be involved and must sign off on matters such as a trust account.
Yes, it will cost money to engage accountants, financial planners and lawyers, but a lot of these costs are ‘one-off’ (such as setting up a trust) or annual costs (such as tax returns) but setting them up correctly can mean the difference between winning and losing, making money and losing money, and being within or outside the law – it's that simple.
Your financial planners are not there to take advantage of you, they are there to work with you and achieve your financial goals- without your success, most of the time they cannot enjoy success either – remember that.
In the end, it comes down to the ‘swimming lanes’, you wouldn’t have a plumber fix your electrical sockets, so don’t have a financial planner work outside their area of expertise.
[1] https://moneysmart.gov.au/financial-advice/choosing-a-financial-adviser