Why financial advice?
So here you are, you have reached a point in your life, a trigger, a significant change in your situation where a big financial decision needs to made.
Perhaps you are a year or two away from retirement, and now worry about where money will come from. Will you be able to still afford the annual overseas holidays now? Will you be able to continue to enjoy eating out at that lovely little Italian restaurant? Or perhaps you have been running a business for many years, having made many sacrifices and now realise there must be more to life than working seven days a week.
Perhaps you had all your superannuation in those high-risk investment styles, which had done very well during the boom times in the markets. However, with a market downturn, you now fear you have lost it all and worry you need to keep working even longer. You may be thinking to yourself, “Where to now and do I have enough”?
You recall at that last dinner night with those lovely and outgoing friends and how they spoke about their financial adviser. “You should really chat to them,” they tell you with enthusiasm as they recall their own great experiences with financial advice. Though you ask yourself, what would I get from financial advice? What is the value to me?
The Value of Advice
More than seven in 10 Australians currently receiving advice believe it has generated more value to them than it has cost
In 2019 fund manager Fidelity International, in connection with Core Data undertook a study, The value of advice. 2 which included surveying 2,228 Australians of which 594 were retiree and 1634 were non-retirees. Of those surveyed, 502 were currently receiving advice, 570 had previously received advice, whilst 1,156 had never received advice.
Some of the key findings of the report;
- 67% of Australians say they worry about money at least monthly
- 52% of Australians say financial issues have affected their mental health
Further findings from those surveyed that had received financial advice;
- Almost 89% of Australians receiving advice believe it has given them greater peace of mind financially
- 86% of Australians receiving advice believe it has given them greater control over their financial situation
The report determined that advice helps Australians achieve their personal and financial goals. Many of the respondents from the survey said they sought financial advice due to change of life situation, or a trigger event. Four in five Australians that received financial advice confirmed they were able to achieve their financial goals with the help of advice. When asked what personal goals has receiving financial advice help you achieve 43.1% stated living my desired lifestyle.
When asked what personal goals has receiving financial advice help you achieve, 43.1% stated living my desired lifestyle
Where to go for financial advice
Perhaps, now having some understanding of the significant development in financial advice since the Royal Commission, and the outcomes of the value of advice as outlined in the Fidelity International and Core Data research, you wonder where to seek financial advice.
The government website Moneysmart, provides details of how to choose a financial planner 3. Moneysmart explains you should first understand what you want from advice, understanding how much you have and what you want to achieve. The site also explains you should choose the right financial advice for you. Do you have a simple, single-issue advice need? At first glance, many of us believe that our circumstances are quite simple. For some of us, when we dig a little deeper and start asking ourselves further questions, we discover our needs are more comprehensive.
Moneysmart suggests seeking advisers that are members of professional associations – including the Financial Planning Association and the Association of Financial Advisers. Moneysmart also suggests meeting and comparing financial advisers. Asking advisers about their qualifications, what fees you will pay and how they will consult you on important decisions will help choosing the right financial adviser for you.
Introducing a Life Centred Approach to living your desired lifestyle
Many forward-thinking financial advisers understand their clients value lifestyle above all, wanting to do the things in life they would prefer to do. Wealthwise financial advisers for instance do not provide any advice until they fully understand the life their client’s seek. Only then once they understand the goals, the resources available now, and in the future will they provide any advice.
A Wealthwise financial adviser will focus on you, not product. Rather then focus on returns or replacement of a product, Wealthwise financial advisers will focus on helping their clients understand now much is enough, and explain the steps to get there.
So, is financial advice worth it? As the research from Fidelity indicated, many people that had received financial advice had received value beyond the cost, both from a tangible and non tangible benefit. Perhaps for those going through the uncertainty from life transitions, including retirement, selling a business, losing money in downturn markets, it is worth it.
The benefit is certainty and peace of mind in knowing you have enough without fear of running out of money is all the value ever needed.
1. https://financialservices.royalcommission.gov.au/Pages/default.aspx, retrieved 19 April 2020
2. https://www.fidelity.com.au/insights/investment-articles/the-value-of-advice/ 19 April 2020