Financial Planners Joondalup

What Does A Financial Advisor Actually Do?

22 Sep

What Does A Financial Advisor Actually Do?

When most people find out I’m a financial advisor, they start looking for the nearest exit. Many people think that financial advisors are expensive and therefore only for wealthier individuals and families. They think that they need to have hundreds of thousands of dollars in the bank for a financial advisor to be able to help them but this simply isn’t the case.

A good financial advisor also referred to as a financial planner is able to help anyone who wants to manage their money better, be able to save for short and long term goals, and plan for a comfortable retirement. No matter whether you are a single young professional starting out in your first full time job or a family with children who needs to plan for their future, using a good financial advisor can be one of the best decisions you will ever make.

There are a few key things that any great financial advisor will do when they start working with a client. Let’s take a look at these now:


First and foremost, your financial advisor will need to know how much money you currently have coming in and how much money you have going out. They’ll look at your cash flow management  and work out if you could be spending your money in smarter ways, enabling you to afford things like private health cover and income protection insurance that you may have previously thought of as too expensive.


Then they will start working out what sort of savings plans you need in place. Are you always going on an annual family holiday overseas? Are you saving up to buy your first home or an investment property? Do you want to regularly top up your superannuation to ensure a comfortable retirement? All these things need to be included in your budgeting each month.


Next they’ll look at your superannuation policies. If you’ve moved jobs a few times you may well have several different superannuation accounts with different providers. They’ll also check and see if you have any insurance policies which are included in your super and work out if they are covering you sufficiently or if they should be moved around or even cancelled. Retirement planning  is a key area for many, if not all, financial planners.


If your financial planner is also a mortgage broker, they will look at your current mortgage and see if you have the best mortgage for your financial situation. If they aren’t a mortgage broker, they may refer you to one who can look at this for you, as your mortgage is often your biggest outgoing and should be a priority to reduce where possible and where it makes financial sense. Sometimes the cheapest mortgage isn’t actually the cheapest in the long run.


Next comes insurance. As an insurance broker, your financial planner will consider the following. Do you have life insurance, Total & Permanent Disability (TPD) insurance or income protection? If you do, they will assess if it is the right level of cover for you and if the policy is right for your circumstances. If not, they will consider if you need it and if so, how much you need to be covered for. This will vary depending on each client’s circumstances and requirements.


If you’ll be making investments as part of your savings plans or retirement strategy, your financial planner can help you determine how risk averse you are so you can work out what kind of investments you would be comfortable with. Not all financial planners will deal directly with the investments themselves, but in that case they should be able to refer you to a reputable investment advisor.

Estate Planning

Some financial planners also provide assistance with estate planning and wills. Having a will is one of the most important things you should do, especially if you have children. Financial planning is intrinsically linked with estate planning because knowing what will happen to your family and your assets once you are gone is key to an effective financial strategy.

If you’ve always put off using a financial advisor but would like to start managing your money better, speak to the financial planners at Perth’s Luda Financial Solutions. Our friendly team of financial advisors and para planners are ready to guide you and start helping you to improve your cash flow management  which will enable you to plan effectively and realistically for your future.