At 60, the average Australian can expect to live another 25 years. The need to plan for at least 25 years without income may seem daunting, but get it right, and it can mean 25 years of relaxation and enjoyment. A good financial adviser will use a detailed knowledge of taxation, superannuation and social security laws to help you to
- set financial goals and put you on the right road to achieving them,
- minimise tax and maximise social security benefits,
- grow your savings and establish a post-retirement income,
- manage your financial risks.
Choosing the right advisor
Fortunately, it isn’t that hard.
1. Shortlist 2 or 3 advisers near your home or workplace by:
- using the Financial Planning Association “Find a Planner” tool,
- using the Association of Financial Advisers “Find an adviser” tool, or of course,
- by asking friends and colleagues if they can recommend someone
- update – use the Government’s Financial Adviser’s Register to check their credentials.
2. Phone or email them and ask for their:
- Financial Services Guide – this will describe their services and what they charge. It must also tell you if they receive any other payments of benefits, who owns their business and if they are linked to particular product suppliers,
- Australian Financial Services Licence number – check this at ASIC Connect to make sure their licence is valid.
3. Talk to your shortlist, by phone or in person so you can compare their comments and choose someone you feel comfortable with.
Trust your instincts – if they don’t feel right, look elsewhere. Don’t forget to ask them what:
- their qualifications are and how long they have been a Financial Adviser,
- products they advise on,
- their process is, and how they get paid – and what you get for the money.
4. At your first meeting:
- be prepared – take a list of your assets (home, savings, super, car, shares, any other investments), debts (mortgages, loans, credit card balances), income and expenses, what insurance you have, whether you have an up-to-date will,
- think about specific goals (what is most important – a comfortable retirement, paying off the mortgage, the kids education?),
- ask the adviser about the trade-off between risk and return and how that impacts your ability to meet your specific goals.
5. When they give you their advice:
- take your time to read your Statement of Advice and any Product Disclosure Statements,
- ask as many questions as you like until you’re comfortable.
Remember, if you aren’t completely comfortable, try another adviser – it’s your money, it’s your life.
Bad Apples and Good News
Recent high profile cases underline the dangers of choosing the wrong financial adviser.
The good news is that new laws* mean advisers…
- are now far more qualified
- must offer advice in your best interests
- can’t be paid a commission by product providers
…and it isn’t hard to choose a good one…
* this doesn’t apply to advice given before 1 July 2013 so if you have implemented older advice, think about reviewing your plans.
What are your thoughts?
Are you considering seeing a financial planner? Did we leave anything out? Is there anything else you’d like to know about organizing your finances? Do you have any other investment questions?
Join the conversation — leave a comment below and let us know what you’re thoughts are.