If you currently don’t have a financial adviser, this article may give you some insights into how an adviser can add substantial value to your financial planning and how to find an adviser that suits your needs. Some advisers offer an initial, obligation-free meeting at no cost. It may be worth talking to a few advisers until you find someone you’re comfortable with.
Whilst an adviser can help with a one-off issue, for example to guide you through a big financial decision or consolidate multiple super accounts, this article focuses on the benefits of an ongoing relationship with an adviser.
A Macquarie Wrap account is designed to be managed with the assistance of an adviser.
If you’d like help finding a new adviser, please visit ASIC’s moneysmart website.
What an adviser can help you with
Whether you’re single or in a relationship, have a young family or are approaching retirement, good financial advice can help you set financial goals and put a strategy in place to achieve them. It should also ensure you have appropriate life, permanent disability and income protection insurance in place to protect you and your loved ones from circumstances that impact your ability to earn your current level of income.
A qualified financial adviser will consider your overall situation and tailor a plan to help you achieve your short and long-term goals.
Getting a picture of your current and future financial needs
There’s a lot to consider when trying to map out your financial future. For example, you may have a mortgage you want to pay down as quickly as possible but are worried you’re not adding enough to your super, or you’re earning enough to cover your current expenses but are concerned about the upcoming costs of your children’s education. Your financial situation can change significantly over your lifetime, for example if you start a family, have been retrenched or are planning to retire soon.
Your financial adviser will go through your individual circumstances and help you get an idea of your current and future financial needs so you know what to plan for.
Setting your financial goals
If you’re not clear on what you’re working towards, an adviser will take the time to discuss what's important to you and ask about your short and long-term goals. They can help you set realistic financial goals and discuss with you how you can achieve them. If you’re not on track to meet your current goals, they can help you adjust your goals or strategy so the goals become achievable.
Putting an investment strategy in place
Once you’ve worked out your goals, your adviser will put together a plan to help you achieve them. This is likely to include an appropriate investment strategy for growing and managing your savings.
In deciding on an appropriate investment strategy, an adviser will consider your risk profile. They’ll generally ask you to complete a questionnaire to work out how much risk you’re willing to accept with your financial strategy. This will help them recommend suitable investments for you.
When investing, a common goal is to try to maximise growth in the value of your investments. However, high returns are often associated with high risk and not everyone is comfortable with risks such as potential negative returns. Investing is also about protecting against losses. A financial adviser knows how financial products work in different markets and will be able to explain the potential risks versus benefits of different types of investments, so you can make an informed decision about how to invest your savings. In addition, they’ll make sure you don’t put all your eggs in one basket by helping you diversify your investments.
Monitoring your investments
Your investments need to be monitored in case market conditions change, which may impact your potential returns. Your adviser can keep a close eye on your investments for you and make changes where necessary to help you stay on track to achieving your financial goals.
Planning for retirement
Planning for retirement is a complex issue. There are different strategies available to try and maximise your expected retirement income.
If you’re thinking about retirement, we encourage you to read our article Getting the best value from financial advice during your retirement.
Maximising tax efficiency
A financial adviser should consider your tax position when making recommendations to you and help you implement a tax effective financial plan.
Determining appropriate types and levels of insurance cover
Securing a healthy financial future isn’t just about how much money you accumulate. You also need to look at how you can protect yourself and your loved ones against unforeseen events, such as death or disability. An adviser can help you decide whether life insurance products are suitable for you based on your circumstances.
Before you see an adviser
Before your first meeting with an adviser, it's important to work out what you’re trying to achieve. Think about what’s important to you, what your short and long-term goals are and how comfortable you are with taking investment risk.
Giving an adviser accurate information about your situation allows them to tailor their advice to best meet your needs. Try to go in prepared with a list that includes your:
- personal situation: your age, relationship status, dependents and work situation
- assets and their value: any real estate you own, savings, car…
- liabilities: your mortgages, loans, credit card debt and any other debt you have
- income: your salary and any other income (eg. from investments) and any social security benefits
- expenses: your weekly or monthly living expenses
- current investments: superannuation, shares or other investments, including their current value and fees if possible
- insurance policies: any insurance you hold on your home, car, life, income and the amounts you’re insured for
- any will or power of attorney you have in place
- any accountant or lawyer you use
Your first meeting
The adviser will use the first appointment to get a picture of your personal and financial situation, as well as your risk profile, i.e. how much risk you're prepared to accept to reach your goals. This will help them recommend suitable investments and financial products for you.
This meeting is a good opportunity for you to see how comfortable you are that the adviser will be able to meet your requirements.
Fee structures
The fees you pay to your financial adviser depend on the services you receive. Advisers can charge fixed fees or percentage-based fees. They may also receive a commission on the product they recommend you.
Your adviser will explain their fees to you in detail before you take up any services. Make sure you understand all fees and ask questions if you’re unsure.
