Obtaining financial advice is still critical in the current financial landscape
The current financial climate may feel uneasy given the ongoing Royal Commission into the financial sector. The financial industry is built with many different facets, but the largest is trust. When you contact a financial professional, you are trusting their opinion and potentially trusting them with your wealth and other assets. Whilst the results of the Royal Commission are deeply concerning, it is important not to tar all those in the financial services industry with the same brush. Whether it is finance or medical, engineering or restaurants, there will always be a few bad individuals who spoil the reputation of the many. Irrespective of the industry, the ethical and highly regarded will always outnumber the unethical. The importance for financial advice will always remain as the industry evolves with new products and regulations.
Importance of Advice
Regardless of the current state of the financial services sector, the importance and relevance of financial planning remain. According to a 2016 MLC White paper, close to three in five (56%) Australians were concerned about being able to maintain their lifestyle in 10 years’ time, with those aged 50–70 (61%)—who are more likely to be either already retired or approaching retirement—more likely to worry about being able to keep the same lifestyle. This indicates there is still a great need for financial advice in Australia. A financial planner can help you make the appropriate investment decisions for your circumstances. Ensuring your assets are growing and invested wisely can help set you up for a comfortable retirement and help provide a “worry free” life. Research shows that people who seek the advice of a financial planner do better than those who do not, with those who used financial advisers or planners being significantly less likely to say they would rely on the government in retirement. Not only investments, but advice from a financial planner can help you with other subjects such as estate planning, insurance, and debt reduction.
Selecting the Appropriate Adviser
Understanding that receiving financial advice is important, but selecting the appropriate financial planner is even more critical. Given the current conditions unfolding, you still may be thinking the industry is littered with dishonest professionals, but that couldn’t be further from the truth. There are several ways to go about vetting professionals throughout the industry and the first is start with your close friends and family. Word of mouth is a strong selling point for many financial planners because if their reputation is smeared, they will likely go out of business with time. Check with people you know and see if they recommend their financial planner. Odds are even if they do not utilize one currently; they can point you in the right direction.
Look for a financial planner that runs their own business and does not work for big corporate brands. Instead choose a financial planner who runs their own business. These financial planners are small business owners and their success comes from the success of their client and the reputations that precedes them. It is in their best interest for their clients to do well. Look for a professional who is interested in forming an ongoing relationship with you.
Another important tip is to look for a financial planner who is a Certified Financial Planner (CFP). This is the highest designation in the field and provides assurance they are appropriately educated and comply with industry regulations.
To wrap up
When seeking out a financial planner or financial advice, don’t let the media and actions of a few persuade you to refrain from seeking out the help you require. Obtaining advice from a Certified Financial Planner has the potential to improve your quality of life. The longer you delay getting help the longer it takes to achieve your financial goals.
The information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. The views expressed in this publication are solely those of the author; they are not reflective or indicative of licensee’s position, and are not to be attributed to the licensee. They cannot be reproduced in any form without the express written consent of the author. Elliot Watson Financial Planning Pty Ltd and its advisers are Authorised Representatives of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.