Tag Archives: financial advice

What should I expect when seeing an Adviser?

What should I expect at my first meeting?

Your initial consultation with a financial planner will give you a chance to get to know each other.  Most provide an initial consultation at their own time and expense.

Your financial planner will explain how their service works, and how it can work for you.  You should receive a Financial Services Guide and an Adviser Profile and have these documents explained to you.  You’ll have the opportunity to talk about your current financial situation and your financial goals.

Some questions to consider before your first meeting:

  • Reflect on what you want in life. Start with the next few years. Are there any changes you’d like to make, or things you’d like to do? What about 5, 10 or 25 years from now? Where do you want to live? What do you want to be doing?  Is retirement on your radar?  Are there specific goals you’d like to meet in the near future?
  • Consider your attitude to money.  Are you a spender or a saver? A risk taker or someone who prefers more certainty? When it comes to spending and managing money, what do you enjoy and what keeps you awake at night?  You can complete a Risk Profile questionnaire that can provide you with you personal risk profile in relation to different investments.  You might be much more aggressive when investing your superannuation than you would be if saving for a home deposit.
  • Think about the financial issues you find most challenging.  Where do you think you could be making better decisions?  What do you think you need to better understand?  Do you know you have downfalls in specific areas?

Talk to your spouse or partner about these issues too. When you visit a financial planner, you’ll want to discuss what it is you want to achieve together as well as your individual dreams.

Many people also neglect to educate their children about money.  What issues did you wish you knew about when you were younger.  Is there something you could pass on to make their life a little easier going forward?

What to bring along

To help your financial planner gain a clearer understanding of your current finances and the services that could be right for you, a little preparation can go a long way. If possible, try to gather the following information before your first consultation:

  • Your income. If it’s easier, feel free to bring in tax documents, especially if you have income from multiple sources or you’re self-employed.  Otherwise, a recent payslip is helpful.
  • Your assets. Including property, superannuation, savings and investments.  Do you also have different structures like Trusts that hold assets?
  • Your budget.  An estimate of where your money goes each month, including your mortgage or rent, personal or business loans and credit card debt will be helpful.
  • Insurance covers. Especially life, disability and income protection policies, if you have them.
  • Questions. In addition to a list of your short and long-term financial objectives, bring any questions or concerns you may have.  And write them down so you don’t forget any!

Your first meeting is informal so don’t worry about gathering all the details if you can’t lay your hands on everything.  The important thing is to get started thinking about your financial future.  If you choose to proceed with your Adviser, you can nail the details in subsequent meetings.

To find out more, contact us and we can guide you through the process.

Educate yourself on financial advice

You might be surprised to know, that working out how to achieve your financial goals is easy and you don’t have to earn a high income to do it.

Whether you’re looking to get your financial affairs in order, buy a first or subsequent home, start a family or prepare for your retirement, seeking quality advice from a qualified financial expert can help you achieve your goals sooner, and with more confidence.

So just what is financial advice?

Financial advice is about much more than just making money. It’s about creating new opportunities to help you achieve whatever you desire in life. A financial planner can help work out what’s important to you. They can help develop a plan that aligns your financial decisions to your lifestyle goals.

Priorities can change over time, as can economic conditions, government legislation and investment markets. Advisers can help re-focus your plan, track your progress and keep you accountable along the way, whether you’re starting out, building wealth or planning for retirement.

Seeking financial advice will help you identify solutions to important questions like:

  • Will I have enough income to live comfortably in retirement?
  • Is my family protected should something unexpected happen – what do I need to know about life insurance?
  • How can I make sure I have enough money to fund my children’s education?
  • How can I invest and structure my finances in the most tax effective way?
  • How can I manage my debt and pay off my home sooner?
  • How can I make my money work harder for me?
  • What’s the best structure to protect my investments and assets?
  • How can I maximise my entitlements to government benefits?
  • How does estate planning fit?

At its best, financial advice is an ongoing long-term partnership centered entirely on your goals.

If you’re weighing up whether financial advice is right for you, consider booking an initial complimentary obligation free appointment.  We’d be happy to help!

Stay on top of your business finances

As you know, your finances can make or break your business, so it’s vital to keep them in check. Here’s some tips!

Don’t miss out on entitlements

Take advantage of recent tax and regulatory changes, such as:

Also, the lower 27.5% tax rate for businesses with a turnover under $25 million came into force starting in the 2017–18 financial year.

Brush up on basics

Have a clear idea of your where your income streams are coming from and where your funds are going in expenses. It’s a good idea to always overestimate business expenses and to keep an emergency fund in case something goes wrong… simply becuase it can. Constantly review your budget as it will keep changing over time.

Cash flow is the fuel that keeps a business running smoothly and you need to keep a close eye on it.  Do you understand your break even point?  How many sales are required before you cover costs and then turn a profit?

Get help with bookkeeping

You might save money by doing your own bookkeeping, but seriously, do you want or need to?  If you aren’t good at it or have trouble finding the time, it can actually hurt your business. Hiring a bookkeeper or accountant with the expertise to dissect your numbers, help you calculate deductions, organise your cash flow and keep your records in order might just be one of the best investments you’ll ever make.  I know it was for me!

Despite being a finance chick myself, it’s not what I love doing or am especially good at.  I’d rather be sitting with my clients and assisting them any day of the week!

Also, if you’re tech savvy, consider using a finance app or cloud accounting solution that provides real-time insights into your finances and saves you even more time.

Be proactive

Don’t be afraid to shop around for new suppliers or to negotiate better deals.  Loyalty is lovely, but not when it hurts your bottom line.

Encourage clients to pay quickly and email invoices as soon as you complete a job.

Most importantly, take time off to work on your business, rather than just working in it.  It might be ‘easier said than done’ but it’s a fabulous and worthy investment of your time.

Get Retirement Ready!

Planning is key… and so is getting advice!

Avoiding pinching pennies in retirement because you haven’t saved enough means serious planning.

First, figure out how much you’ll need!

Find out how much income you will need by answering a few simple questions:

  • What are your personal retirement goals?  Do they include climbing mountains, lawn bowls, sky-diving or spoiling the grand kids?
  • What kind of lifestyle do you want?  Are you quite frugal or want to live it up?
  • What is your life expectancy?  Do you have good genes and are likely to outlast your cronies?  Or have you lived a little harder than most and might not see the great-grand kids arrive?

While it’s relatively easy to set goals and have some lifestyle expectations for retirement, estimating how long you’ll live can be tricky, but is crucial to your retirement decisions. It can help decide your own asset allocation or when to stop working to ensure you have enough funds for your retirement.

Although there are tools and calculators you can use for working out life expectancy, your financial adviser can help guide you through the process too. Your adviser can also help you come up with an estimate of your required retirement income based on your lifestyle expectations, risk profile and life expectancy.

Second, ensure you’ll have enough income!

With an estimate of how much you’ll personally need, your adviser can make recommendations to help you meet your required retirement income. These strategies may include transition to retirement or contribution strategies, growing your retirement fund by investing some or all of it or even growing wealth outside of superannuation.

Most investment products carry some sort of risk, so it’s important to choose ones that suit your risk appetite and need for returns.

If you want a regular flow of income in your retirement, there are options available for you, as well as ensuring you won’t outlive your funds.

Always seek professional advice and how you can get appropriate outcomes for you.  And of course, I’d love to help!

A couple of questions for your adviser

With all the drama currently surrounding the Royal Commission, banks, financial institutions and advisers are heavily in the spotlight.

Whether you have an adviser, or you want to start looking, what are a couple of questions you should ask before you get started?  Remember, you’re looking for the best person to fit your needs.

1  What is your background? What formal qualifications do you hold?

In dealing with any professional, it is important to have an understanding of their professional background and qualifications.  Doctors and Lawyers usually have their certificates proudly displayed on the wall.  But how can you be sure?

All financial advisers in Australia must meet minimum educational requirements and these standards are constantly being raised, soon to a degree level minimum as the Industry works toward becoming a Profession.  That said, there’s already many professionals working in the financial advice space.

And, the more qualified and experienced your adviser is, the better for you. Your Adviser should also show a commitment to continual ongoing education. When looking at an adviser’s qualifications, consider their formal education and their life and business experience:

  • What degrees, diplomas or post-graduate qualifications do they have? Do they hold a basic diploma or a Masters Degree?
  • Do they have professional designations that have been earned or paid for?
  • What specialist accreditations do they hold? e.g. life risk specialist, SMSF specialist, estate-planning or aged-care specialist etc.
  • What is their experience as a financial adviser?  How many years have they been advising or in the financial services space?  And how long do they plan on continuing to give advice?
  • Are they a member of any industry associations or professional bodies that adhere to a code of ethics, such as the Association of Financial Advisers or the Financial Planning Association?

If you think someone might be fudging the certificate on the wall, you can always check an adviser’s qualifications through the financial advisers register on the ASIC MoneySmart Website.

2 What is the scope of your advice?  What can you advise me on?

In a similar way to lawyers or medical professionals, not all financial advisers provide the same services.  Some offer holistic advice, covering everything, others offer advice in limited areas such as insurance or superannuation. It is important to ask a potential adviser if they are capable of providing all of the services you require. It’s no surprise that an adviser that suits one individual may not suit another.  These areas should all be explained on the Adviser Profile that accompanies their Financial Services Guide.

Some advisers may not have the experience or qualifications to advise on a particular specialist areas that you require, such as self-managed superannuation funds, direct shares or gearing and margin loans.

Have a think about your long-term needs and objectives and make sure the adviser you choose can meet them all.

This is a person you will be trusting to shape your financial future and have a long-term relationship with.  Also ask your adviser what actions they will take to implement, update and maintain any plan you devise together.  How often will you meet with your adviser? Do you have access to a team of experts or just the adviser?  If your adviser is on leave or uncontactable, who can they turn to?

 

These are just a couple of questions at the start of any conversation you can have.  And the beauty of the internet means that you can even do some snooping before you meet to qualify your potential adviser before you arrive.

There’s lots more to cover, like fees and charges, whether the adviser is ‘aligned’ or ‘non-aligned’ with a large institution or how long they’d like to keep practicing for…  But, you might just get a feel of whether or not they’re the one for you from these couple of questions.

 

Are you a Key Person?

Key-person insurance is Protection for your business

How would your organisation cope if something happened to a key person?

Unexpected events can play havoc not only with people’s lives but also with businesses.

However, business owners are often so busy they don’t stop to consider the true cost of the loss of a key employee, business partner or even themselves.  Eeeek!

The knock-on effects may include disruption to other staff, missed opportunities, delays or penalties for late delivery of projects, lost revenue, increased expenses, significant costs to find and train a suitable replacement, loan repayment and even loss of the business.  Ouch!

What is key-person insurance?

Key-person insurance protects a business’s financial position against the significant impact of a traumatic event such as the death or disablement of a key person.

A key person may be an employee, owner or an individual whose contribution to the business is significant.

This cover is not a specific kind of insurance but the application of life insurance to protect against key-person risk. It can be used with buy/sell life insurance (also known as business succession insurance) which covers the change of ownership if an owner dies or becomes incapacitated.

The benefits

Often a cash injection to an affected business may keep a bad situation from becoming worse or even catastrophic. The insurance proceeds may be used to:

  • minimise or eliminate the potential loss of revenue, sales or profits
  • help cover the often significant costs of finding or training a replacement
  • service or repay any debts that are called in
  • cover the impact of a writedown in the goodwill of the business
  • provide needed liquidity
  • help keep staff and maintain essential supplier relationships.

Are there alternatives?

A business may have other strategies to help manage their risks, including asset sales, promoting staff or reallocating workloads even temporarily, using profits, borrowing more, or drawing down existing loan facilities.

However, insurance is the only practical alternative where a business doesn’t have the capacity to cover its risks.

If you want to know more and see if it can apply to your business, why not give me a call? 07 5593 0855.

Create a great financial new year

New Year’s resolutions are easy to make but often hard to keep. But there are real benefits to making financial resolutions. Here are some helpful suggestions to get you started.

Chances are by now, you’ve forgotten what you wanted to achieve last New Year’s Eve, but a new financial year is also a great time to reset.

Get back to basics

If you find it near-impossible to reach your financial goals, you may need to revisit the basics: sticking to a budget. Does temptation usually unravel all your good saving intentions? Consider opening a locked savings account that you can’t deduct money from for a period of time, and automatically transfer funds into it each payday.  Automating everything in your life that can be is truly a gift!

Plan for large purchases

Whether you need a new fridge or are considering placing a deposit on a home, the earlier you start planning for these purchases, the more manageable they become.

If you know you’ll need a new item in 6 months that costs $1,000,  that means you need to set aside around $40 per week to make it happen… that’s a few sneaky coffees that may need to go!

Set up an investment plan

If you’re considering investing this year (instead of someday,) developing a sound investment plan is essential for your success. This may include working with your financial adviser to identify clear financial targets, calculate how much you can afford to invest and determine how much risk you’re willing to take on. 

If you’d like to have a small nest egg before you sit down with someone, again, automate the process so every week you’re setting aside an amount to put towards that portfolio.  Everyone started somewhere!

Review insurance policies

Knowing you are properly insured provides peace of mind if your circumstances change unexpectedly. But identifying appropriate insurance policies and levels of coverage for your unique situation can be difficult – and getting it wrong is risky… as you’ll likely find at claim time. This is why it’s important to regularly review your insurance policies with your financial adviser, especially if your situation changes.

You may be able to find that funding via various structures frees up cash flow to invest in personal insurances you may not have otherwise been able to afford.  Good advice is worth every cent!

Check your super

If you have multiple superannuation accounts – or have forgotten where your super is – you’re not alone. According to the Australian Taxation Office, there’s $18 billion of lost super waiting to be claimed nationally.1

Effectively managing your super is vital for building your retirement nest egg. Contact your financial adviser who may help you manage your super.  It’s also worth seeing what insurances are covered in your fund so you aren’t paying extra for cover you don’t need.

Set retirement goals

The earlier you set clear goals for your retirement, the more options you’ll have. Work out what assets you have – from your home to superannuation – and review your current spending patterns, then determine your goals for retirement and what lifestyle you’d like to enjoy. This will help you calculate how much you’ll need.

Remember, we’re now living a lot longer, which means our money may now need to last 30 years in retirement, or we may choose to work longer.  Our health is also an issue that needs consideration as we age and this too will impact our retirement years.

Create an estate plan

Estate planning involves more than writing a will. It outlines what you want done with your documents, contacts, debts, bills and assets, making the process easier for your beneficiaries after you’ve passed away.

Whatever your financial New Financial Years’ resolution may be, seeking professional advice may help you make it reality this year.

 

Note:
1 The Sydney Morning Herald, 2017, ‘Almost $18b in lost super waiting to be claimed’. Accessible at:

http://www.smh.com.au/money/super-and-funds/tax-office-holds-records-of-almost-18-billion-in-lost-super-20170920-gylo3z.html