What do Financial Planners actually do?
- Financial advice can provide you with valuable assistance in finding financial products to suit your situations.
- Using the services of a financial adviser can be useful for certain situations where: you are buying a home, planning for retirement, deciding on investment or insurance products, etc.
Financial planners are industry experts who are able to offer invaluable advice and assistance to consumers who do not have in-depth knowledge and expertise about financial matters. In the same way as you might go and see a doctor when you are unwell, you may consider going to see a financial planner or adviser if you have financial issues that you may need to address. Of course, not everyone needs the services of a financial planner all of the time and there are some people who may never need to use a financial planner. Whether or not you need a financial planner depends on a number of factors, such as:
- What your financial goals are.
- How complex the financial matters you are dealing with are.
- What your knowledge of the financial markets and your options is like.
- What your financial situation is like.
When might the services of a financial planner be beneficial?
Financial planners can provide assistance across a whole range of areas of your financial life. These can include:
- When you are buying a home: If you are buying a home, you may find that the services of a financial planner or adviser could help you in terms of choosing the right mortgage and the right loan for your needs. This can also be the case if you are remortgaging.
- Savings and investments: A financial planner can help you make more informed decisions with regards to the best savings and investments to help ensure you yield the best return in the current market.
- When you are planning your retirement: If you are nearing retirement age and you want to ensure that you have adequate funding, you could find that a financial planner who specialises in retirement and pensions could be extremely helpful. This could also be the case if you are not yet near retirement age but you want advice on how to maximise your retirement funds for the future.
- Getting advice on financial products: There are many different financial products and services that you may be considering but that you may be unsure of where to start. This could include life insurance, income protection or trauma insurance. Again, the services of a financial expert could prove invaluable if you want to ensure you make the right decision.
Video case study: How an adviser can help you get life insurance cover
There are different types of life insurance policies available on the Australian market, each with their own set of:
- Features and benefits
- And exclusions
You might be thinking, "how is policy A different to B, or maybe even with C? They all look the same to me. An adviser can provide personal advice that takes into account your personal circumstances, needs and financial situation.
They will help you make an informed decision on the type of cover, level of cover and policy arrangement that is most suited to you. This can remove much of the stress that you may be experiencing trying to find the right policy, saving you both time and effort as the adviser compares multiple policies for you.
What are the benefits of receiving financial advice?
Warren Buffett once said “to invest successfully, what’s needed is a sound intellectual framework for making investment decisions and the ability to prevent your emotions from corroding that framework”. Luckily you can achieve this by hiring a financial adviser.
While a lot of people aim to be financially independent, only a small number of Australians will achieve this goal. You can be among those few through professional and unbiased financial advice. It can improve your financial position and support the lifestyle of yourself and your family by providing:
- Expert Skills and knowledge – The finance industry is a very complicated environment with complex legislation and an increasing number of wealth creation and investment options which are constantly evolving. Instead of treading this uncharted territory alone, a highly trained and skilled finance professional can walk you through and present opportunities which could improve your position.
- Tailor-made plans – A financial planner should provide a customised strategy and plan that is in your best interests and suitable for your situation, goals and objectives.
- Goal documentation – Another characteristic of good financial advice is to help you discover, document and update your financial goals and objectives. Written goals can act as a constant reminder to both yourself and your adviser as to what needs to be accomplished. You should bear in mind that written goals tend to be accomplished while non-written goals remain a dream.
- Unbiased Decisions – When emotional and impulsive financial decisions get in the way, chances are they can be the wrong decisions. Objective and unbiased financial advice will help make fact based recommendations.
What should I look for in a financial adviser?
In order to get good advice, you must be able to identify what a good financial adviser is. Professional financial help goes far beyond picking stocks. Hiring an adviser gives you the expertise and resources you need to plan your financial future. This coaching and support can help you to smoothly endure and make the most of the circumstances in your life - career, marriage, children, assets and liabilities. You can do this by putting the following factors into consideration:
- Experience and Qualifications – How long has adviser been working in the industry? Do they have any certification? Be sure to look for a financial adviser who has experience in insurance, tax planning, investments, estate planning or retirement planning.
- Services Offered – Does the adviser sell stocks, mutual funds and other financial products? Do they sell life insurance? You should be aware that financial planners are basically prohibited from selling insurance or securities without the proper license. Moreover, they are not authorised to give clients investment advice unless they are registered with state or federal authorities.
- Payment - Some financial advisers charge an hourly fee or monthly retainer. Others through percentage of the client's assets they have under management; while others do not charge anything but get a commission from sales of life insurance, mutual funds and other products.
Obtaining financial advice from a professional can mean all the difference in getting your financial situation in order. A financial adviser can give you valuable assistance when you are making a decision on various financial related matters that you deem important such as which life insurance products should you choose or how to plan for your retirement.