The Value of Good Advice and How to Know You’re Getting It

It’s said a single conversation with a wise person is more valuable than ten years just studying books, so who do you talk to about your finances after a recession?

In a global period of increasing market volatility and economic stress, professional guidance and expert financial advice is more crucial now than in the years preceding the impact of COVID-19.

With a wealth of information online and the needs of your own budget to consider, it’s understandable you might question the need to consult with a financial adviser or if the cost is worth it. But with consistent stable returns of investments, tax savings & retirement planning, the advice an expert can provide isn’t just invaluable in dollars and cents, but in your own peace of mind and increased financial confidence.

The Fiscal Value

While value is relative and defined by your circumstances, the tangible benefits provided by good financial advice can save you thousands or potentially millions of dollars from today to your retirement. Estimates by leading long-term investment group Vanguard Australia place the act of receiving financial advice is at least a 2% improvement on real Return On Investment (ROI).

The Association of Financial Advisers’ (AFA) 2018 report demonstrates clearly what real value of good financial advice provides. In their case study (Scenario 3), it showed with modelling what a couple in their 30’s receiving early financial advice could achieve (estimates):

  • 24% increase in ROI after tax per annum
  • Increase of over $700,000 in financial assets by age 60
  • Increase of $2.7 million in life insurance cover
  • Over $15,000 income protection per month

*this is based on a gross shared income of $251,376 p.a.

If you’re apprehensive about how this works based on your income or your stage in life, a general financial check-up can still deliver great returns if you’re approaching or at retirement.

The AFA’s (Scenario 1) for a couple in their late 50’s receiving financial advice, earning a shared income of $150,000 p.a. was able to increase retirement savings by 24% and reduce tax for the rest of their lives by 35%.

More than money

Good financial advice can provide the following tangible benefits – more disposable income, asset management, and savings as you approach retirement. The clarity that comes with having a well-laid-out financial plan with an adviser doesn’t just provide financial security, but grants peace of mind and reduces stress levels, which is proven to help you live longer & healthier.

Being able to plan for your retirement has also helped people psychologically adjust to retiring, allowing for sustainable budgets and lifestyles to be achieved.

How to be sure you’re getting the best advice

  • Figure out what advice you want

The best way to know if you’re getting the right advice is to know what advice you want/need. Before you pick up a phone or attend a consultation, consider what you want to achieve by the time you retire and what you want from your own lifestyle.

  • Use public resources

The Australian government has a wealth of information in regards to examining the credentials of potential advisers, legislative changes and how to invest your money wisely.

  • Get the right advice for you

While many advisers provide general financial advice, it’s important to recognise what level of advice you might need. For example, you may have independent goals in the future such as travel or a loan you’d like paid off sooner than planned. On the other hand, you might want a comprehensive investment and retirement strategy to secure your financial future, particularly if your goal is financial freedom.

  • Find an adviser

Once you have a good idea on what kind of financial advice you need, the next step is to conduct research. Look for a qualified financial adviser through Moneysmart (Australian Government website), your superannuation fund, and your lending organisation (review their rating/performance online).

  • Compare advisers and ask questions

Financial advisers usually won’t charge you for their first meeting, which makes it a good time to ask them as many relevant questions as you can. We advise you ask them about:

  • Qualifications
  • Client base
  • Specialisation
  • The fees they charge compared to the services they provide
  • How they’ll manage your investments
  • How to terminate your contract with them/transfer to another adviser

 

If you’d like to receive advice on wealth management and your financial future, get in touch for more details.

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