Value of Advice
Trusting your financial well-being to tips from mates and handy hints on the TV is a bit like going to your grandmother for medical advice. The best piece of advice you can get is often ‘get some professional advice’. There are many examples that show how good advice from a well-informed financial adviser can bring financial benefits that far outweigh the cost of the advice.
A voice of reason
When the sharemarket is going through periods of volatility, your financial adviser can offer a calm professional voice that will cut through what you hear in the media and ensure you make informed decisions based on your needs, objectives and personal circumstances.
More than simply investing
A good financial adviser will help you decide what you want to achieve with your money, set financial and life goals and then help put together a strategy for meeting them. A complete financial plan will cover a number of important areas:
- retirement planning
- investment planning
- tax-effective investment
- planning for business owners
- insurance
- estate planning
- Centrelink benefits, and
- cash management and budgeting.
Good advice could help add valueThe Financial Planning Association (FPA) recently commissioned a report which showed specific examples where real life financial advice helped add value.* They looked at eight diverse clients of financial advisers (including a wealthy family, a retired nurse, and a family in need). In each case, see the below graph, the estimated financial benefits that flowed through to the clients in these cases far outweighed the cost of advice. For the eight case studies the estimated total value was around $1.7 million.*
*Naturally every case is different. Any value attributed to advice will vary over time due to many differences such as your personal situation, prevailing market conditions, income and expenditure patterns, time horizons, objectives and advice followed. Factors beyond your control could also influence outcomes. These case studies do not show the expected future value that could be achieved in your situation or any other case. Every case and situation will be different and the cost, value and benefit of financial advice actually achieved over time will be wide and varied. |
