What really is a financial plan?

Written on the 5 July 2021 by Parkside InvestorPlus

What really is a financial plan?

It's interesting when a client first comes to see us wanting to set up a structured financial plan.

One of the first comments from clients, even before we start the discovery session, is "so, where will you be investing my money?"

It's at this point I have to gently back them up and explain that a financial plan is much more than investing money yes, of course we do need to put money to work in order for it to grow, yet investments is just one of many steps in a financial plan.

What is a financial plan?

In essence, a financial plan identifies, organises, and prioritises your financial goals, then outlines the steps you need to take to achieve them.

Notice the first steps of the financial plan, namely:

Identifying, organising, and prioritising your financial goals in accord with your values.

Only after this step is completed, do we move onto the 'mechanics' of the financial plan.

Do you know your money why?

Having a clear understanding of your motivations in wanting to set up a financial plan is very important we call this Your Money Why.

Having a financial plan simply for the sake of having one is not a strong motivator.

Think about this, financial plans can stretch over years and decades, depending on the time horizon of your goals.

It's a long haul and if you are not motivated to go the distance, then chances are that your commitment to the plan could dimmish over the time horizon.

Part of understanding your money 'why' is to first understand and define your values what matters to you, what do you stand for and what guides you.

Think of your values as the guiding beacon within you this is what drives you to do the right thing for yourself and for others.

The second part of understanding your money 'why' is how do you intend to use your money.

If the desire for money is aligned with your values, then you have the basis of a sound financial plan.

Then we can move onto mechanics of the plan.

The essential components of a financial plan

Once the core values, goals, objectives, and priorities have been established, the nuts and bolts of the financial plan are worked on.

There are several key elements that are typically involved in a good financial plan.

And although they all affect your money in different ways, their cumulative effect dictates what your financial future will look like.

Here are (some) of the key elements of a sound financial plan and their respective sub-steps.


  • Your income sources and expenses
  • Your assets and liabilities
  • Positives and negatives of your current financial situation
  • Education and any other significant expected outlays of money

Retirement Planning

Estate Planning

  • Who gets what, when and how much and tax estimates
  • Will including Testamentary Trusts, Enduring Powers of Attorney, Enduring Guardianship
  • Gifting to charity etc

Tax Planning & Strategies

  • Capital gains and income tax returns
  • Minimising tax outlay

Risk Management

  • Long-term care
  • Income protection, disability and life insurance
  • Beneficiary and survivor benefit plan
  • Annuities


  • Investment portfolio return report & analysis
  • Asset allocation plans
  • Overview of Super and retirement account investments

Building and implementing your specific financial plan is an integrative process, meaning it takes commitment and investment (time and emotion) from you as well as your financial planner.

At Parkside, we can help you align your aspirations and values with a financial plan so you can meet your retirement goals. It takes more than a single meeting and is an ongoing relationship.

Author:Parkside InvestorPlus
About: As advisers, we act as a fiduciary sitting on the same side of the table as our clients, providing peace of mind, greater control and visibility.

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