Whether you’re feeling on top of your finances or you tend to fly by the seat of your pants and have the savings to reflect it, a financial planner may offer more than you thought.
Regardless of how simple or complex your finances may be, there’s a solid case to be made for engaging a financial advisor. Far from the domain of those that invest, have family trusts or complicated financial affairs, financial advisors can help anyone with advice about a wide range of matters that impact your bottom line, says financial planner and director of Voyager Wealth, Sarah Nulty.
She says financial advisors can help you with one-off, periodic or ongoing advice, and can help you achieve a specific financial goal or achieve a larger financial plan. They can also provide advice simply to help you protect and make the most of the money you have coming in. More specifically, Nulty says a financial planner can provide advice or assistance across a broad range of financial areas:
- Superannuation (including self-managed funds) rollovers or new accounts, or making investments through your fund, pensions, salary sacrificing and spousal contributions.
- Wealth protection and insurances across life, trauma, income, total permanent disability, child trauma and business insurances.
- Transition to retirement, pensions, Centrelink benefits and aged care options.
- Investments across managed funds, direct investments, term deposits and gearing.
- Estate planning from wills to nomination of beneficiaries.
“We may also work in conjunction with other financial professionals – for example, banking, legal, mortgage brokers, insurance brokers and tax professionals, to get you the advice and options for your personal situation,” Nulty says.
In short, think of them as a knowledgeable financial coordinator.
And what can’t they do? Although many financial planners are now registered with the Tax Practitioner Board (TPB) so they can consider tax within our strategies, Nulty says they are not accountants and any complex tax situations or needs must always be considered with an accountant. Likewise, she says they are not solicitors.
“Whilst we can advise in the area of estate planning, identifying the need for certain types of wills, Power of Attorney, and the structures and strategies to assist with transferring your assets should you pass away, we are not able to create a will or Power of Attorney.”
What happens when you engage a financial advisor?
When you walk into a first meeting, come prepared with information and an idea of what your goals are. You’ll also need to be open and honest with your advisor – if you give dishonest or incomplete information, you may receive advice that doesn’t suit your situation (if you don’t have all the information, fear not, just be upfront about this).
Your advisor should ask you about what financial goals you hope to achieve – for example, are you aiming to pay off your mortgage, save for retirement, ensure you and your family are protected in case of an accident or serious injury. They’ll also need a comprehensive overview of your assets, liabilities (including student loans), income, expenses and insurances. If you’re exploring any form of investing, they’ll also need to discuss how much risk you are willing to take.
How to find a reputable financial advisor
The Australian Securities and Investments Commission (ASIC) database provides up to date information about your advisor – including if they’re licensed to sell you certain financial products or provide you with financial advice. Before meeting with an advisor, ask for their representative number and the holder of their Australian Financial Services (AFS) licence. The ASIC Connect Professional Registers will then tell you if the company or person holds an AFS licence.
This license, issued by ASIC, is required by anyone carrying out a financial services business – including selling, advising or dealing in financial products. It provides you with better protection if things go wrong and gives you access to free dispute resolution services. It does not mean ASIC endorses the company, financial product or advice or that you cannot incur a loss from the investment.
The register includes information about:
- The adviser’s qualifications, experience and employment history
- What product areas the adviser can provide advice about (check that these are the areas you’re looking for)
- Whether the adviser is a member of any professional bodies or industry associations that are relevant to providing financial services
- Whether the adviser has been the subject of disciplinary action by ASIC
- The name and number of the Australian Financial Services (AFS) licence holder who employs or authorises the financial adviser to provide advice
- Details about who owns or controls the licence holder.
So even if your financial situation seems straight forward and investments aren’t appealing at this stage of your life, a single consult with an advisor can make sure you’re making the most of the income you have – and you’re protecting it for the future.
Words by Melanie Hearse