Financial Planning Process Guide

Financial Planning Process Guide

Document Version: 3.2
Last Updated: September 2024
Owner: Naomi Street, Head of Financial Planning
Review Date: March 2025

Overview

This guide outlines Southern Cross Financial's six-stage financial planning process, ensuring consistent delivery of comprehensive advice while maintaining compliance with ASIC requirements and our Australian Financial Services Licence obligations. All advisers must follow this process for new clients and comprehensive reviews.

Note: This process was updated in August 2024 to incorporate additional ASIC disclosure requirements. The digital client portal integration mentioned in Stage 6 is still being finalised with our technology vendor.

Stage 1: Initial Client Meeting & Engagement

Objectives

  • Establish rapport and understand client circumstances
  • Explain our advice process and fee structure
  • Complete initial risk assessment and compliance checks
  • Determine if we can assist the client

Key Activities

Pre-Meeting Preparation - Review any referral information from existing clients or professional networks - Prepare welcome pack including FSG (Financial Services Guide v4.3) - Book conference room or arrange video meeting via our secure platform - Send calendar invite with office location/parking instructions

Meeting Agenda (90 minutes) 1. Welcome & Introductions (15 mins) - Tour of office facilities (if in-person) - Introduction to adviser and support team - Offer refreshments

  1. Financial Services Guide Review (20 mins)
  2. Present FSG and explain our licensing arrangements
  3. Detail fee structure (hourly rates currently $385-$485 depending on adviser level)
  4. Discuss conflicts of interest and how we manage them

  5. Outline complaints process

  6. Initial Discovery (45 mins)

  7. Current financial position overview
  8. Life stage and family circumstances
  9. Career and business interests (particularly relevant for our resource sector clients)
  10. Initial goals and concerns

  11. Risk tolerance discussion

  12. Process Explanation (10 mins)

  13. Walk through our six-stage advice process
  14. Timeline expectations (typically 4-6 weeks for initial SOA)
  15. Next steps and fact-find meeting scheduling

Required Documentation

  • Signed FSG acknowledgment
  • Identity verification documents (drivers licence, passport)
  • Initial client questionnaire
  • Preliminary fee disclosure notice

Post-Meeting Actions

  • Send welcome email with fact-find documents
  • Create client file in Practice Management system
  • Schedule fact-find meeting within 2 weeks
  • Update CRM with meeting notes and client risk rating

Stage 2: Comprehensive Fact-Find

Objectives

  • Gather detailed financial and personal information
  • Understand client goals, objectives, and constraints
  • Identify potential strategy opportunities and risk areas
  • Complete comprehensive risk profiling

Documentation Required

Financial Information - Last 2 years tax returns and PAYG summaries - Current superannuation statements (all funds) - Investment portfolios and managed fund statements - Insurance policies (life, TPD, income protection, general) - Bank statements (last 3 months) - Debt statements (home loans, investment loans, credit cards) - Business financial statements (if applicable)

Personal Information - Family circumstances and dependent details - Health considerations affecting insurance or investment - Career progression and income expectations - Estate planning documents (wills, POAs, family trusts)

Fact-Find Process

Meeting Format: In-person preferred, video conference acceptable
Duration: 2-3 hours (may require follow-up session for complex cases)
Participants: Primary adviser, client(s), note-taker

Key Discussion Areas:

  1. Financial Position Analysis
  2. Assets and liabilities detailed review
  3. Cash flow analysis (monthly income vs expenses)
  4. Current investment performance and fees

  5. Superannuation consolidation opportunities

  6. Goal Setting Workshop

  7. Short-term goals (1-3 years)
  8. Medium-term goals (3-10 years)
  9. Long-term goals (10+ years)
  10. Prioritisation exercise

  11. Quantification of goals where possible

  12. Risk Assessment

  13. Complete risk profile questionnaire
  14. Discuss previous investment experiences
  15. Assess capacity vs tolerance for risk

  16. Insurance needs analysis

  17. Constraints and Preferences

  18. Liquidity requirements
  19. Tax considerations
  20. Ethical investment preferences
  21. Family circumstances affecting strategy

Quality Assurance

All fact-finds must be reviewed by Naomi Street or senior adviser before proceeding to strategy development. Incomplete fact-finds delay the entire process and impact client satisfaction scores.

Stage 3: Strategy Development & Research

Objectives

  • Develop tailored strategies to meet client objectives
  • Research and model appropriate investment solutions
  • Consider tax implications and optimal structures
  • Identify implementation priorities

Strategy Development Process

Internal Strategy Meeting - Primary adviser presents client situation to planning team - Brainstorm potential strategies and solutions - Consider regulatory constraints and compliance requirements - Document strategy rationale and alternatives considered

Research Requirements - Investment research using Morningstar Direct platform - Insurance quotations from approved product panel - Tax modeling using Class Super or similar software - Estate planning structure analysis (coordinate with legal panel)

Key Strategy Areas

  1. Investment Strategy
  2. Asset allocation modeling based on risk profile
  3. Platform and fund selection from approved product list
  4. Direct vs managed investment considerations

  5. Tax-effective investment structures

  6. Superannuation Strategy

  7. Fund consolidation recommendations
  8. Contribution strategies (salary sacrifice, concessional, non-concessional)
  9. Transition to retirement planning

  10. Self-managed super fund considerations

  11. Insurance Strategy

  12. Life insurance needs analysis
  13. Income protection assessment
  14. Total permanent disability coverage

  15. Ownership structures (personal vs super)

  16. Tax Planning

  17. Income splitting opportunities
  18. Capital gains tax minimisation
  19. Negative gearing considerations

  20. Family trust distributions

  21. Estate Planning

  22. Will and testamentary trust recommendations
  23. Binding death benefit nominations
  24. Power of attorney arrangements
  25. Business succession planning (where applicable)

Documentation

  • Strategy development worksheet
  • Investment research summaries
  • Insurance comparison analysis
  • Tax modeling outputs
  • Peer review sign-off (required for all strategies >$500k)

Stage 4: Statement of Advice Preparation

Objectives

  • Document recommendations in compliant SOA format
  • Clearly explain strategy rationale and benefits
  • Disclose all fees, costs, and potential conflicts
  • Provide implementation timeline

SOA Structure (Current Template v2.4)

Section 1: Executive Summary - Client situation overview - Key recommendations summary - Expected outcomes and benefits - Implementation priorities

Section 2: Client Circumstances - Personal and financial situation - Goals and objectives - Risk profile and constraints - Assumptions used in advice

Section 3: Strategic Recommendations - Detailed strategy explanation - Alternative strategies considered - Rationale for recommendations - Risk factors and limitations

Section 4: Product Recommendations - Specific product details and features - Why products are suitable for client - Costs and fees disclosure - Risks associated with products

Section 5: Implementation - Step-by-step implementation plan - Timeline and priorities - Documentation requirements - Ongoing review arrangements

Section 6: Compliance Disclosures - Adviser qualifications and experience - Fee structure and payment terms - Conflicts of interest - Complaint resolution process

Quality Control Process

Internal Review (2-3 business days) - Naomi Street reviews all SOAs before client presentation - Compliance checklist completion mandatory - Calculation verification using planning software - Peer review for complex strategies

External Review (where required) - Legal review for estate planning recommendations - Accounting review for complex tax strategies - Insurance specialist review for high-value insurance

SOA Delivery Requirements

  • Client meeting scheduled within 1 week of completion
  • SOA sent to client 48 hours before meeting (secure email only)
  • Hard copy available at meeting
  • Digital copy stored in client portal (when system upgrade complete)

Stage 5: Implementation

Objectives

  • Execute approved recommendations efficiently
  • Ensure all documentation is completed correctly
  • Monitor implementation progress
  • Address any issues or client concerns

Implementation Coordination

Primary Responsibilities - Adviser: Strategy oversight, client communication, complex product setup - Support Staff: Standard forms completion, account openings, document tracking - Compliance: Final checks and lodgement oversight

Typical Implementation Timeline

Week 1-2: Documentation Phase - Investment platform applications - Superannuation rollovers and consolidation - Insurance application submission - Banking and loan arrangements

Week 3-4: Processing Phase - Follow up with product providers - Address any assessment queries - Complete additional forms as required - Arrange direct debits and payment systems

Week 5-6: Completion Phase - Confirm all accounts established - Verify initial investments/contributions processed - Insurance policies issued and premiums commenced - Client confirmation of successful implementation

Common Implementation Challenges

Investment Platforms - ID verification delays (particularly for SMSF trustees) - Bank account verification requirements - AML/KYC documentation requirements

Insurance Applications - Medical underwriting delays - Occupational assessment for resource sector clients - Premium loading negotiations

Superannuation - Slow processing by some retail funds - Outstanding benefits and partial rollovers - Binding nomination updating

Client Communication During Implementation

  • Weekly progress updates via email or phone
  • Immediate notification of any delays or issues
  • Celebration email when implementation complete
  • Scheduling of first review meeting

Stage 6: Ongoing Review & Monitoring

Objectives

  • Monitor portfolio and strategy performance
  • Maintain regular client contact
  • Identify changing circumstances requiring strategy adjustments
  • Ensure ongoing compliance with advice provided

Review Schedule

Comprehensive Annual Review - Full portfolio performance analysis - Goal progress assessment - Personal circumstances update - Strategy refinement as required

Quarterly Check-ins (phone or video call) - Market update and performance discussion - Brief personal circumstances check - Investment rebalancing if required

Ad-hoc Reviews (as needed) - Significant life events (marriage, divorce, new children) - Career changes or business developments - Market volatility concerns - Legislative changes affecting strategy

Ongoing Services Included

Investment Management - Portfolio monitoring and rebalancing - Fund manager research and replacement recommendations - Tax-loss harvesting opportunities - Regular performance reporting

Insurance Reviews - Annual premium and cover adequacy review - Policy optimization opportunities - Claims assistance when required

Superannuation Monitoring - Contribution tracking and optimization - Fund performance monitoring - Transition to retirement strategies

Tax Planning - Annual pre-tax planning discussion - Capital gains tax planning - Superannuation contribution strategies

Documentation Requirements

  • Annual review letters summarising progress
  • Updated risk profile assessment (every 2 years)
  • Ongoing fee disclosure statements
  • Record of advice for minor strategy adjustments

Technology Integration

Note: Our new client portal is scheduled for launch in Q1 2025, which will provide 24/7 access to portfolio performance, documents, and secure messaging. Until then, we continue using quarterly email reports and our existing document storage system.

Compliance Notes

Key Regulatory Requirements

  • All advice must be in client's best interest (s961B Corps Act)
  • Appropriate basis for advice (s961G Corps Act)
  • Warning about incomplete advice where applicable
  • Conflicted remuneration provisions compliance
  • Ongoing fee disclosure obligations

Documentation Retention

  • Client files retained for 7 years after relationship ends
  • Digital backups stored securely on Australian servers
  • Hard copy documents in fireproof safe
  • Regular compliance audits by Annabel Tan's team

Updates and Changes

This process is reviewed quarterly and updated as required for regulatory changes or business improvements. All advisers receive training on process updates and must acknowledge receipt.

Contact: For questions about this process, contact Naomi Street (naomi.street@southerncrossfinancial.com.au) or refer to the Planning Team chat channel.

This document is confidential and proprietary to Southern Cross Financial. Not for distribution outside the organisation.