When it comes to planning your business, it is advisable to seek advice from people like a financial planner. They can help you to do many of the things needed to set up and run a business, to expand and grow it and to wind it up when you are ready to retire. The right kind of financial planning will ensure that your cash flow is healthy so you can pay your bills on time and make sure the business is making a profit.
However, when you are looking for a financial advisor, you have to take care that they are working independently. Some such people get paid for selling certain products such as insurance or other products, and this makes their advice suspect because it is a conflict of interest. They are likely to advise you that a certain product – that they get paid for – is the best option for you when it is really not.
In fact, this is the same with many people, such as those who sell insurance or other financial products. Planners who work for a specific bank will always refer you to that bank’s products, whether it is a simple bank account or something more complex. So how do you find out?
Many independent planners will mention on their websites that they are not affiliated with any other business, such as an insurance company or a bank. And you can always ask them, but they are sure to have their little speech ready about how impartial they are and would only advise what is in your best interests. This can even be true to a certain extent, but what they don’t explain is they are only choosing the best product for you out of all the ones they will get paid for.
You also need to make sure your financial planner is fully qualified. They can be either qualified or certified, and both are represented by the Financial Planning Association of Australia (FPA). However, the qualified one has only needed to do a basic ASIC course of a few weeks. The certified planner is a step ahead in education, having completed many modules around financial planning. The certification they hold is recognised internationally.
Ideally, your planner should have done both courses to ensure they are proficient in giving advice about superannuation, insurance, securities and basic deposit products.
It is better still if they have a degree or diploma in such things as accounting, business management, finance and/or economics. You can then be assured that they know what they are talking about and will not give you advice that is wrong for your business.
The FPA has an online service that helps people find the planner for their business and financial goals, and you can check each one further using the ASICs register for financial planners.