Only 20% of Australian’s have seen a Financial Planner before. That means the vast majority of Australian’s have never seen a Financial Planner and the two questions on top of their mind are
“What does a Financial Planner do?”
“How can a Financial Planner help me?”
Let’s look at some of the ways a Financial Planner is able to help you and your family.
1. Managing your Cash Flow
Got a household budget, do you stick with it? It is very easy to say that you should spend less than you earn, then save the rest for a rainy day. Although, sometime this is near impossible – think Christmas or when the rego & insurance is due on both cars at once. A Financial Planner is able to help you create a cash flow plan for your household, helping you take the correct path for living the lifestyle you want now, and putting something aside to grow your overall wealth.
2. Putting Debt to Work
Various types of debt exists. Some debt can be good, some is just bad. A Financial Planner is able to educate you on the difference between good and bad debt, plus ensure your debt is structured in the best way possible. By ‘debt’, I am referring to:
- Mortgage debt
- Credit Card debt
- Investment loans
- HECS debt
- Business debt
- Margin loans
- Personal & car loans
- SMSF loans
3. Saving for your Children’s Education
We all want to provide our children with the best education possible. However, parents often struggle with how to manage their cash flow, whilst putting something aside for school fees. We all know that private school fees are expensive. However, even public and catholic school fees add up when you factor in uniforms, excursions, fund raisers, and extracurricular activities. With 2 young children myself, I can appreciate the impact that school related expenses can add up very quickly. I could swear it wasn’t this expensive for my parents when I was growing up, however admittedly that was a very long time ago when you received hand-me-downs and if you had a gold coin at the school canteen you were considered rich!
4. Investing your Money
Saving money is difficult, so you want to make sure that your savings are invested appropriately and working hard for you. Deciding how to invest is complex, however a Financial Planner is able to help. They have the experience and knowledge to assist in navigating the options and opportunities that are open to you. Often the first thing that you should consider is how to protect your savings from downside risk – that is how do you invest so you don’t lose your savings that you worked so hard to accumulate.
5. Setting and Achieving your Financial Goals
The first step that many people take with a Financial Planner is to discuss their financial goals, then create a plan that clearly indicates how to reach those goals. Your financial plan will help you change over time due to your personal priorities changing. Therefore, your plan needs to be fluid and reviewed every year. Financial Planners are able to assist in setting, adapting or reshaping your plan so that it meets your changing lifestyle and circumstances.
6. Keeping your Finances on Track
Creating a financial plan is one thing, sticking to the plan is the hard part. It can be compared to exercise, having a personal trainer helps increase the chances of reaching your fitness goal. Financial Planners are like a personal trainer for your finances. However, this does not mean your plan cannot be flexible, rather it means that when you veer off track, someone is there is bring you back on course (without the yelling and screaming of a personal trainer).
7. Setting you up for Retirement
A Financial Planner is able to assist you in making smart choices regarding the correct time to retire, or when to move to part-time hours to achieve the retirement lifestyle that you desire.
The plan should make sure you have access to your money when you need it most, while taking steps to optimise your retirement income, plus continuing to enjoy the lifestyle that you desire.
With the average life expectancy increasing rapidly, it is likely that most people will live 20-30+ years in retirement. This means that it’s becoming even more important to plan appropriately for your retirement since it takes up roughly one third of your total life!
8. Financially Protecting your Family
Building assets is important for the future, however protection of what you already have right now is more important, including your ability to earn an income. In the event that something happens to you or your spouse, you need to have a back-up plan in place for continuing the lifestyle you desire. If you lack adequate insurance, you could find yourself in an unpleasant situation and having to make drastic financial changes during a difficult time.
It is helpful to understand that in the event of illness or injury, the lifestyle of you and your family is able to be maintained as much as possible.
9. Estate Planning
Ensuring that your family is well looked after once you and/or your partner have passed away can be very complex and intimidating for most people. A Financial Planner is able to make sure that you have an effectively structured estate plan, that should you pass away, your wealth is transferred to the right people, in the most tax effective way possible.
This is particularly important if you have a mixed family with children from previous marriages, or a business. I have personally seen situations where the main breadwinner has passed away and left an extremely complex web of businesses, family trusts, employees and debt that is impossible for their spouse to understand or manage.
10. Financial Education
If you are not a full time financial professional it is impossible to educate yourself and keep up-to-date on all the developments that could affect your personal finances. Financial Planners can assist you to ‘learn the language’ of finance, plus explain the concepts, terminology, and ensure you develop a strong sense of confidence in understanding your financial situation.
Some common terminology includes:
- Salary sacrificing
- Gearing
- Asset classes
- Superannuation Guarantee (SG) contributions
- Co-contribution
- Transition to retirement
- TPD and trauma
- Risk tolerance
- Dollar cost averaging
Not all of these terms will be relevant to you straight away, however they may become relevant in the months and years to come.
11. Removing Financial Stress
Financial Planners keep you informed during good and bad times, letting you know how changes in investment markets affect your strategy, superannuation and investment portfolio.
The Financial Planner also informs you of any pertinent events or changes to the law that could impact your investments, such as global unrest, elections, and natural disasters.
The state of your super or investment portfolio is not something you should worry about constantly, and your Financial Planner can help remove some of the stress which often accompanies volatility in investment markets.
12. Educating your Family Members
A Financial Planner has the ability to explain the important parts of your financial plan to your family, including your children to ensure they have an understanding of managing money and how your plan may impact them in future years. In the event that you pass away, it’s likely that your children will need to seek assistance around the transfer of your wealth, plus understanding the impact on each of them personally. Your Financial Planner can facilitate this process with your children or spouse.
13. Structure for Success
When your situation changes, updating your financial structure is important. A Financial Planner will be able to help you with updating the structure of your finances to ensure you have the optimal structure in place to build wealth and minimize tax. For example, you may go from being married to divorced, you may start a self-managed super fund, establish a family trust, become unemployed, become a parent or retire. Every major change in your life is likely to have an impact on how you structure your personal financial position.
14. Provide Investment Advice
Generally, this is what most people think about when you mention the term “Financial Planner’, so why have I left it until right near the end? Well, there is no doubt that this is a major part of what a Financial Planner can do for you. However, no Financial Planner has a magic crystal ball which can predict future investment markets to guarantee you the best returns. A Financial Planner can assist you to select the appropriate investments for your particular situation and attitude to investment risk, just don’t expect miraculous returns with no downside risk.
15. Connecting you with a Team of Experts
Financial Planners are professionals with connections to other experts and specialists. If needed, Planners are able to help you get in touch with other specialists for certain requirements, such as a Mortgage Broker, Accountant or a Solicitor.
Additionally, Financial Planners are able to work alongside your current Lawyer or Accountant to implement your financial plan. The concept is that they will work together to help you make informed and smart choices with your money.
In summary, a Financial Planner can help you achieve your financial goals FASTER, EASIER and with more CERTAINTY than you could achieve by yourself.
Author: Pat Casey – Managing Director, Assure Wealth
Note: always check the ASIC Financial Advice Register to confirm that a Financial Planner is authorized to provide personal financial advice. Plus, consider this guidance on how to choose a financial planner, including what questions to ask.
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If this article interested you and you would like to speak to Pat Casey on the phone, select a time to speak Pat – Financial Planner Sydney.
At Assure Wealth we specialise in helping busy, successful families structure their finances to achieve greater wealth and financial peace of mind. We have a particular focus on helping people to establish a self-managed superannuation fund (SMSF), plus self-managed superannuation property investment. Our services operate on a fee for service basis to offer complete transparency on costs.
Author: Pat Casey – Managing Director & Financial Planner Sydney – Assure Wealth
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Disclaimer: The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Walker Lane Pty Ltd Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Walker Lane nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.
Assure Wealth Pty Ltd ABN 31 965 466 780 Corporate Authorised Representative no. 1244817, Patrick Casey Sub-Authorised Representative no. 1244748 of Walker Lane Pty Ltd ABN 70 626 199 826, an AFSL holder No 509305.
