One of the most valuable times to talk to a financial planner is when you’re approaching retirement and choosing the right one can be a tricky decision. It’s a decision that could have long-term ramifications for your future.
Some financial advisers receive benefits through incentives for recommending certain financial products. Others are not legally allowed to provide advice about certain aspects of your finances, so may not be useful for your specific needs.
So how can you find the right person for you?
If you’re a member of an Industry SuperFund, chances are you have access to free or low-cost financial advice from one of the fund’s advisers. If you only need advice about aspects of your superannuation, such as your investment mix, salary sacrificing, voluntary super contributions or insurance options, this service may adequately meet your needs, and save you money.
If your financial planning needs are more wide-ranging, such as consideration of all your assets and planning for retirement, you’ll be able to get that advice through your super fund as well, but you’ll more than likely need to pay a larger set fee for that.
If you choose to get advice outside your Industry SuperFund, that’s fine too but there are a number of precautions you should take.
Once you’ve decided on a financial planner, your next move should be checking potential candidates on the financial advisers register. Run by the Australian Securities and Investment Commission, the register includes details of Australian financial planners’ qualifications, experience, employment history, whether they’ve been the subject of any ASIC disciplinary action, what products they are allowed to advise on and their licence.
If you can’t find an adviser on the register, take them off your list. They’re operating illegally and if they give you bad advice you’ll have no recourse.
Once you’ve established an adviser is right for you – can advise you on the areas you want advice on, has a solid employment history – ask for their financial services guide. It will usually be on their website, but you can also ask them for a copy.
This guide will tell you how they are paid. Some are paid via a fixed fee, which would generally be between $2000 and $4000 but more if the work is particularly complex. Others earn their money through commissions and referrals, meaning they make money each time they sign a client up to a particular financial product, or refer them on to the likes of a property developer or accountant.
This doesn’t necessarily mean they’re giving you bad advice, but you should be very aware of the nature of their relationship with products and services they’re recommending before you commit.
Sometimes these relationships aren’t outlined in their financial services guide. For example, if a financial adviser also owns a mortgage brokerage they may not receive a commission from referring you there, but their business will benefit. The financial advisers register will outline details of these business relationships.
Taking these steps should help you find an adviser with your best interests at heart.
Keep your super invested when you retire and grow your income.
Turn your super into an income stream when you retire and you can receive a regular income to top up the Age Pension, while the balance stays invested.
Everything you need to know is at industrysuper.com.