What should a financial plan actually contain?

General advice only · AFSL 222640 · Global Mutual Funds Pty Ltd

The direct answer

A proper financial plan (in Australia, a Statement of Advice) should set out your goals, your current financial position, the strategy recommended, WHY it suits you, what it will cost in dollars, the alternatives that were considered and rejected, and any conflicts of interest. If yours is mostly product brochures and risk profiles, it is incomplete.

What it depends on

The full answer depends on your specific circumstances. Here’s what matters.

Whether it is personal or general advice

Personal advice considers your objectives, financial situation and needs, and must come with a Statement of Advice (SOA) under the Corporations Act 2001. General advice does not consider your circumstances and comes with a general advice warning instead. Know which one you are receiving.

The scope you agreed

Advice can be comprehensive or limited to one topic (for example, only super or only insurance). A narrow scope is legitimate, but the SOA must state it clearly so you know what was NOT considered.

How the reasoning is shown

The Best Interests Duty requires advisers to act in your best interests. A good SOA links each recommendation back to your stated goals and explains the trade-offs — cost, risk, flexibility and tax — in plain English.

The last 10%

What a qualified professional can add

The answer above covers the general position. Here’s where professional judgement — applied to YOUR specific situation — makes the difference.

Translating vague goals ("retire comfortably") into measurable targets with dates and dollar figures
Modelling the interaction between super, investments, debt, tax and Centrelink for your specific situation
Reviewing and updating the plan as legislation, markets and your life change

Questions to ask before you engage one

If you decide to engage a professional, these questions help you evaluate whether they’re right for your situation.

Which of my goals does each recommendation address, and how will we measure progress?

What alternatives did you consider and why did you reject them?

What will this advice cost me in total dollars this year and each year after?

What is outside the scope of this advice?

Your next step

Pull out your most recent Statement of Advice and check it against the list above. If goals, reasoning, costs or alternatives are missing, ask your adviser to explain them in writing.

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