What is financial planning?
Answer
Managing money, saving, and investing for the future
Explanation
Financial planning in Australia is the process of setting financial goals and putting strategies in place to meet them across a person's lifetime. It typically covers cash-flow management, debt reduction, savings, superannuation, investment outside super, insurance, estate planning, tax minimisation within the law, and retirement income planning.
Financial advice is given by financial planners registered through the Australian Securities and Investments Commission's Financial Adviser Register. As of 2026, advisers must hold a relevant tertiary qualification (typically a bachelor's degree or postgraduate qualification in financial planning or related field), pass a national exam, complete a professional year, meet annual continuing professional development requirements, and abide by a Code of Ethics set by Financial Advisers Standards Authority successor arrangements. There are about 15,500 registered advisers in Australia.
Advice can be general (broad guidance not tailored to the individual) or personal (specifically tailored). Personal advice requires the adviser to act in the client's best interests under the Best Interests Duty introduced by the Future of Financial Advice (FOFA) reforms in 2013, strengthened by the Quality of Advice Review reforms following the 2018 to 2019 Hayne Royal Commission. The adviser must provide a Statement of Advice (or Record of Advice for limited matters) documenting the recommendations and the reasoning behind them.
Costs vary widely. A Statement of Advice covering a comprehensive review can cost from about 2,500 dollars upwards, with ongoing service fees of around 0.5 to 1 per cent of assets under advice. Free or low-cost alternatives include MoneySmart at moneysmart.gov.au (federal government), the National Debt Helpline (1800 007 007) for people in financial difficulty, super fund general advice services that are often free for members, and intra-fund personal advice on limited topics that some funds offer at no additional cost. Workplace Employee Assistance Programs sometimes include free financial consultations. The Quality of Advice reforms have aimed to make professional advice more accessible by allowing super funds and other providers to offer scalable advice.
Why this matters for your test
Good financial planning makes a measurable difference to retirement outcomes, and recognising the difference between general and personal advice plus the Best Interests Duty helps new citizens choose advisers wisely.
Source: Australian Citizenship: Our Common Bond (2024)
