By Liz Maroney, Westlawn Wealth Adviser 18 February 2015
For many Australians, sitting down with a financial adviser seems a daunting proposition. Especially when they’re not really sure what a financial adviser does exactly … or how a financial plan can help them personally. And for those who do seek professional financial advice, it’s often for a specific issue such as a desire to reduce tax, qualify for the age pension or boost a super balance prior to an imminent retirement.
While a financial adviser can help with such specific issues, it’s the holistic approach that demonstrates the true value of financial advice.
Value of financial advice … both tangible and intangible
Improved prospects for a more comfortable retirement
Help in avoiding bad investments
Making it easier to follow a budget, and
Creating and aiding the ability to save.
And to put the benefits of financial advice in tangible dollar terms, the study found that after taking costs into account, an individual who has received financial advice generally saves an additional $1,590 each year compared to a similar individual without a financial adviser.
Of course, the benefits of financial advice grow over time. Therefore, the younger you start with advice, the better off you can be at retirement. The study found that based on a risk-free rate of return of 3% pa, and accounting for the different savings behaviour of different age groups, the additional savings accumulate to an average additional wealth at retirement (age 65) of approximately:
$91,000 if you start your savings plan from age 30
Understanding the financial planning process will go a long way towards making financial advice seem a lot less daunting.
The Financial Planning Association outlines 6 steps that will help you understand what to expect when meeting with a financial adviser:
Engage with you – First, your financial adviser explains the process they will follow, finds out what your needs are and makes sure they can meet those needs. You can ask your adviser questions about their professional background, how they work and how they charge if you choose to proceed.
Identify your goals – Next step is for you and your adviser to identify your short and long term financial goals as a foundation for developing your financial plan.
Assess your financial situation – Your adviser then examines your current financial position including your assets, liabilities, insurance, and investment or tax strategies.
Prepare your financial plan – Taking into account your financial goals and your current financial situation, your adviser will recommend suitable strategies, financial products and services and answer any questions you may have.
Implement the recommendations – Once you’ve agreed to your financial plan, your adviser will put your financial plan into action. Where appropriate, they will work with other specialist professionals such as accountants and solicitors.
Regularly review your plan – Your circumstances, lifestyle, and financial goals are likely to change over time. So it’s important that your financial plan is regularly reviewed to make sure you stay on track to meet your goals.
To find out how financial advice can help you, or to find out more about the planning process, contact your Westlawn Wealth Adviser.
When meeting with a Westlawn Wealth Adviser, you’ll need to bring certain information about your current finances with you.
General Advice Warning The advice on this site may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial, tax and/or legal advice prior to acting on this information.
Westlawn Wealth Management Pty Ltd ABN 32 124 861 409, Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749, Australian Financial Services Licensee, 105 -153 Miller Street North Sydney NSW 2060.