During these turbulent times, we are all reading negative headlines such as “property prices are set to decline by up to 20%”, “unemployment is suggested to double to 10%” and “business will not recover until a vaccine is found for COVID–19”. With headlines like these, it’s no wonder we’ve got financial jitters.
Currently, many people are facing an uncertain financial future, and choosing a trusted and experienced financial adviser is imperative if you want to receive quality taxation and financial planning advice.
The following lists some of the aspects you should consider before selecting your financial adviser.
Is the adviser an Authorised Representative of a bank or an insurance company? The concern here, as raised in the Bank Royal Commission, is that the adviser may be tempted to look after their employer or promote their company’s products rather than act in your best interest. The adviser may also be limited in the investment products or financial strategies that they can recommend.
The adviser should have the necessary qualifications in financial planning. The higher the level of qualifications clearly the better.
What is the age and experience of the financial planner? Are they a graduate or have they been in this industry for a number of years? You need someone with experience during turbulent times such as COVID-19 and the GFC. That is, it is a lot easier to provide advice in a rising market than in a declining or volatile market.
Adviser not salesperson
Avoid financial planners or product providers that only want to sell you a product such as, managed funds or investment property.
Depending on your age it may be more appropriate to pay down your debt rather than purchasing more investments.
With interest rates declining over the past 10 years we would expect that our level of debt would diminish, however, the opposite has occurred. Now before you conclude that this is because young people need to pay inflated prices to get into the property market, you may be surprised that a study from RMIT and Curtin University found that the number of homeowners aged between 55 and 65, who had a mortgage, tripled since 1990. The problem with this statistic is that more and more retirees will need to access their superannuation in order to pay off their mortgage prior to their retirement.
Review the Financial Planner’s Financial Services Guide
All financial planners need to provide potential clients with a copy of their Financial Services Guide (FSG). This document will outline their services and how they charge for their services.
Is the adviser a member of any professional associations? These professional bodies generally require the adviser to invest in professional development training to keep themselves abreast of recent legislation changes and investment strategies.
Does the financial planner have any additional qualifications such as taxation or legal? That is, taxation plays a very big role in the type and nature of the assets we choose to invest in and how to structure the ownership of these assets. Legal is also valuable with regard to asset protection for investors who also own small businesses and for estate planning purposes.
Last but certainly not least, do you feel you have a good rapport with the financial planner, does the financial planner communicate well and does the financial planner understand your goals and objectives.
Should you require more information on taxation and financial planning advice, contact Peter Quinn to submit an online enquiry or call us on +61 2 9580 9166. We also offer a FREE 45-minute consultation should you have other financial planning, taxation or superannuation issues you may wish to discuss.