Getting financial advice
Getting financial advice
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When should I seek out financial advice?
There’s never a bad time to seek out financial advice from a planner. Whatever your gender, life-stage or level of wealth is, financial advice can put you on the road towards being more financially secure.Financial advice can also help you find confidence in your financial choices so you stress less about money. In turn, it might even help you improve your physical health and relationships with the people you love most.
If you’re thinking about getting financial advice from a planner but not entirely sure you need it, read on. Some of the most common situations in which we highly recommend financial advice are described below.
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An interesting fact about financial advice
In 2011, the Financial Services Council (FSC) estimated that individuals who sought financial advice were better off between $29,000 and $91,000 at the point of retirement.
Source: Rice Warner’s Future of Advice (6th August, 2020) ricewarner.com
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You're in a young mid-life stage
You’re at the beginning. Entering the workforce. Establishing the foundations on which your career will be built. Moving on from there, you may want to start a family or even purchase your first home.
Choosing the right premixed superannuation investment option/s
As a Super SA member, you’ll have a variety of premixed investment options to choose from. Each option offers different levels of return and suits differing risk appetites. With the help of a financial adviser, you may understand these options better and choose an option or mix of options you’re comfortable with.Travelling the world
A financial adviser can help you put together a plan to accumulate the cash you need to visit the most exotic locations in the world. They may also be able to help you put a travel budget together as well as highlight some of the effects your spending may have on your future.Getting married
Getting married can cause couples a lot of stress. The average wedding isn’t cheap and neither are the honeymoons. Very often, couples go into post-honeymoon debt. With financial advice, you may avoid these challenges or navigate them with less tension.
Having your first child
Having a child comes with endless expenditures that can include medical costs, insurances, baby seats, prams, food, clothing...it never ends. A financial adviser may be able to help you put together a roadmap to help you get through these financially trying times.
Insurance
Sickness and/or injuries are inevitable so taking out insurance to protect yourself and your family is prudent. The challenge is there are a million options out there. With the help of financial advice, you may be better positioned to pick the options most appropriate to your family’s situation but also perfect for your budget.
Purchasing your first home
Putting together the deposit for your first mortgage is no small feat. And neither is consistently paying down the mortgage over a lengthy period of time. With the help of a financial adviser you may be able to purchase your first home with a solid game plan that sees your mortgage repayments making less of an impact on other parts of your life.
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You're in a mid-life stage
By this time, you’re trying to consolidate all that you’ve gained. You’re trying to make your lifestyle more comfortable. At the same time, your eyes are set on the future and what it may bring.
Making investments
As your career or business progresses, it’s likely you’ll be earning more and more money. If you have excess cash, it’s wise to make it work as hard as possible, so you can relax later in life. With countless investment options available, a financial adviser may be able to help you choose the investments that work best for you.Paying for home renovations or extensions
Over a lengthy period of time, it’s inevitable your home will need maintenance and/or structural repairs. You may even want to add extensions to your home as your family expands. Financial advice may get you ready for the inevitable or place you perfectly to continue developing your dream home.Managing your debts
If you’re not careful, it’s easy to rack up a lot of debts. It’s also easy to lose visibility of these debts. A financial adviser may be able to help you stay on track to paying them all off or at the very least, clocking up minimal interest on them.Inheritances
Inheritances come in many different forms. They can be anything from a treasured possession through to cash, property, shares or even superannuation passed down. Inheriting anything may come with complex tax considerations. A financial adviser can walk you through all of the necessary considerations.Income protection
Sometimes, unfortunate events can occur which result in an inability to work due to sickness and/or injury. This means loss of income. A financial adviser may be able to help you prepare for the worst by helping you choose the appropriate income protection insurance.Planning for long-term care
If you or loved ones are getting closer to a time where you can no longer take care of yourself and require long-term care, a financial adviser might help with strategies to fund accommodation costs, maximising Government pensions, minimising nursing home fees, and more.Planning for retirement
When you’re in the latter stages of your mid-life, it’s not unusual to begin thinking about retirement. A financial adviser might help you think about what your retirement needs are going to be, whittle down outstanding long-term debts, planning a superannuation and Income Stream strategy and much more.
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You're pre-retirement
As you get closer to the end of your working life, you’ll start thinking about what to do after it wraps. What occupies your mind may come down to how ready you feel and what you’ve achieved through your life.
Protecting assets
More often than not, people are focused on acquiring assets, not protecting them.
The problem is, partnerships can break down and some people may even challenge your estate after you die. A financial adviser may be able to advise on the ownership of possessions, structuring purchases by a low-risk spouse and getting the right insurance in place.Eliminating debts
It’d be horribly stressful to enter your pre-retirement phase with a multitude of large debts still outstanding. Financial advisers are experts at eliminating debt through the management of investments, setting up debt repayment plans, estate planning and more. They’re also there to keep you motivated and make sure you get that debt down.Helping your kids
As you begin considering retirement, there’s a likelihood you’ll want to help your kids with their financial challenges. A financial adviser may be able to help you understand how you could help your children on the path to their financial independence while simultaneously avoiding the pitfalls of financially rescuing your children or lending money you can’t afford.
Wills and trusts
If you have a healthy amount of money and assets, you may want to express your love by giving some of that money to your children, grandchildren or even a cause you believe in. A financial adviser might help connect you to the right legal people to draft wills and get estate planning under way.Preparing a retirement plan
Depending on the complexity of your finances, it may be difficult to get complete transparency on how much you’ll need to enjoy your retirement, especially a retirement that’s comfortable for you. A financial adviser may be able to help you develop an understanding of whether you’re on track to achieving the retirement you want.
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You're retired
It’s time to let go, have some fun and live your best life. Travel the world and see the sights you’ve never seen. Indulge in hobbies or find new ones. Or just stay home and enjoy spending time with your family. You might even want to give some of your wealth away.
Healthcare
As you advance, your physical needs are going to be very different to that of your younger years. There’s a likelihood the costs of healthcare will be higher and insurances become more challenging. A financial adviser may be able to help you navigate these challenges and keep costs as low as possible.
Aged care planning
No longer want to live in your own home? A financial adviser might help make your transition to aged care a smooth one. They may help you have the lifestyle you want while minimising both entry and ongoing expenses. They may also get you thinking about how your decisions can impact your age pension eligibility.
Travelling
If you’ve done well, your trips away won’t be weekend affairs. They might be lengthier holidays that could last weeks or even months. A financial adviser may help you get emergency funds for unforeseen expenses set up, arrange suitable insurances or refer you to the appropriate legal figures in the case the unexpected happens.
Inheritance tax mitigation
In Australia, we don’t have inheritance tax. Assets passed down are exempt. However, what is passed down can impact a family member’s financial position and in turn, impact the taxes they pay. A financial adviser may help clarify the tax implications on additional income, capital gains from asset sales and super inheritances.
Gifting your family
With plenty of cash and assets, you may be considering giving some money to family members. A financial adviser may be able to discuss the impacts it will make on you, the possible emotional impacts on your family, gifting free areas per financial year and the limited circumstances by which the ATO can tax these gifts.Preserving capital
Having worked so hard to earn what you have, it’s only natural to want to preserve those earnings as much as possible. A financial adviser may help you decide on fixed interest strategies that limit volatility while simultaneously providing high levels of liquidity moving forward.
Estate planning
Estate planning is more than just putting a will together. It’s about working out what you want to happen to your assets and affairs when you pass, but also who takes charge if, for whatever reason, you can no longer make decisions. A financial adviser may be able to guide your decisions, help you understand the tax that may be payable on a death benefit paid out of your super fund, connect you with estate lawyers and more.
Centrelink benefits
When you retire, a variety of Centrelink benefits may become available to you. A financial adviser may be able to help you develop a deeper awareness of these benefits as well as the best way to structure your income and assets so you can make the very most out of any of the benefits available to you.
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A few more facts about financial advice
Survey-based research conducted in 2014 showed that —
✓ Investors who received advice over four to six years accumulated 69% more assets than those individuals who had no advice.
✓ Investors who received advice over 15 Years accumulated 290% more assets than other comparable households.
Source: The Gamma Factor and the Value of Financial Advice (Aug 2016) Cirano
