Why every retiree needs a financial planner

The need for a financial planner and why this is important for all retirees

Why every retiree needs a financial planner

Head of Retirement Income Research at Challenger, Aaron Minney is the man who knows how retirement income really works. Today he makes a case for the need for a financial planner and explains why this is important for all retirees – not just those with large nest eggs.

For more information visit www.challenger.com.au.
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    COMMENTS

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    Winston Smith
    20th Sep 2020
    8:19am
    No, no, no, no, no.

    It's far too hard to find an ethical, honest financial planner.

    I have worked in the finance industry. Misleading at best. Just plain corrupt at worst. Do your own research. Talk to your super fund. A lot. Talk to others. Balance out the advice from multiple sources.

    Good luck.
    LFC
    20th Sep 2020
    10:30am
    Agree. There are just too many examples ( and they are the only ones reported ) of wrongful and dishonest actions by so called Financial Planners. The whole industry is a sham written on the backs of commissions, trailers and dishonesty.
    Fliss
    20th Sep 2020
    11:45am
    Agree Winston. Although I don't believe all are necessarily misleading or corrupt. But logically, even the best ones are basically working a job. They work that job for the same reasons most of us do/have done - to make as much money as we possibly can. So too often the "financial planner" will steer people to invest in projects where they personally will receive the most gain, rather than their client. (Same as a salesman leading you to buy the product where his commission is greatest). Yep! Best to do your own research! The info is all out there & easy enough to obtain these days!
    lysistrata
    20th Sep 2020
    1:24pm
    Luckily I found an honest one who does very well by me. His charges are reasonable and as he says as he is on a percentage the more he makes for me the more he will be paid ( and we are all paid for our expertise...I know I was all my life). So when I retired I suddenly found out pleasantly ... where did all this money come from? .I have far more than I could ever spend in my lifetime thanks to my financial planner. And it seems more money appears in my account every day, which is his expertise at work certainly not mine as my skills lie in a different area. I am very grateful to him and have come think of him over the last 25 years as more of a friend.
    et54
    20th Sep 2020
    8:54am
    I find it strange that there is not a code of conduct or something with regard to this profession. They are often dealing with large sums of money and they should be held responsible in some way.
    Winston Smith
    20th Sep 2020
    10:28am
    The Libs held a Royal Commission. Found heaps of problems. Did nothing.
    Blossom
    20th Sep 2020
    8:57pm
    There is laws they have to abide by. If they think you may be breaking a Tax or Centrelink law they are legally obliged to advise you that you could be breaking the laws and what the "punishment" could be if either Dept. audits you. They can also be charged and even disqualified from working as a financial planner.
    I have had a conversation about this with a Financial Planner
    Rusty
    20th Sep 2020
    9:15am
    Well said Winston
    Cool Nanna
    20th Sep 2020
    9:20am
    We have been retired for 5 years and have had a financial planner for 20 years. Best thing we ever did!!
    sunnyOz
    20th Sep 2020
    10:12am
    Cool nanna - How do you know? You cannot compare it to if you had NOT had a financial planner. You may have done far better without a FP.
    The only time I went to a financial planner, I ended up far worse, but luckily got away very quickly.
    Lindtay
    20th Sep 2020
    9:24am
    I agree with Winston but would add to go and see a Financial officer at Centrelink . They are free, unbiased, know what you can and can’t do to increase your aged care pension and have your interest at heart.
    Mariner
    20th Sep 2020
    10:25am
    Yes - we have done exactly that 6 months before I turned 65. Good advice given, received a part married pension, partner had to make do with her super till she was 65 as well. The Financial Officer explained every step we had to do.
    Bundabergian
    20th Sep 2020
    10:53am
    Yes we also went and saw one. She had access to a load of fancy programs and graphs that told us we are basically OK as long as we are frugal. And when we are not OK the pension will kick in.

    I(being the spreadsheet queen) have done the same with an excel spreadsheet estimating what we will spend (or gain) every year till we die (we have to die at 85!) but I don't know what, if anything, the tax payer will add to help us.

    She was mildly helpful but unbiased and didn't try to sell us anything. She didn't cost a cent! We will go back and see another when our circumstances change.
    almost a grey hair
    20th Sep 2020
    9:32am
    I agree with Winston we rely far too much on these so called experts whose main aim of going into that area is to make as much money as possible for themselves.
    It is so easy to do it yourself by reading everything you can on super rules, c/link rules etc and before long you become an expert yourself. The main thing you have to do is take an interest first like learning a musical instrument or learning a language and before long you know what is going on and you don,t have to pay anyone for vacuuming out your pockets.
    aussiehero
    20th Sep 2020
    10:41am
    We retired 14 years ago with an investment in super of $420,000, without any financial advice.
    This investment has given us a monthly return, amounting to 5% pa usually, as we have always elected to take the minimum. Plus we have had a part pension (about half the full pension).
    In spite of the fact that it has fed us for 14 years that investment is now worth $654,377. We are proud that we have something to leave our daughter.

    Oh, and we have avoided financial advisers like the plague!
    Rusty
    21st Sep 2020
    7:54am
    Can I ask which investment/super fund you have your monry with? I am about to retire and need to convert my funds.
    johnp
    21st Sep 2020
    10:52am
    Agree with most here and as per the royal commission it is best to avoid fin planners and just read forums like this. BTW aussiehero have you the answer for Rusty and I ??
    Fedup
    20th Sep 2020
    10:52am
    Finding a financial planner who has your best interests at heart, no hidden agenda and doesn’t cost the earth isn’t easy.

    I went to one for about 20 years, but stopped when I realised that my visits were a greater financial benefit to him than they were to me.
    Roy
    20th Sep 2020
    11:10am
    Same thing with us, our financial planner never disclosed his fees for the simple reason that we always believed with Super Funds he was only entitled to 'trailing funds' for providing (free) advice... However, when we switched to Pension Funds he deducted 1.25% or more when dividends increased. Doesn't sound like much, but as an adviser all he was doing were the annual splits between high & low risk returns. no special skill required - we can all do that, just follow the Super Funds manager basic advice, it is tailored to your risk strategy. The bottom line is that if all you have is Super Funds + Pension, you don't need advice...
    cupoftea
    20th Sep 2020
    11:11am
    I will be going to Centrelink International Services to work out my British and Australian Pensions
    ozirules
    20th Sep 2020
    11:12am
    I wouldn't take on a financial adviser unless they worked for a share of gains only. No gain, no fee. I haven't found one yet so I do it myself. Haven't slept better since I took over my own financial management.
    Migrant
    20th Sep 2020
    11:16am
    Sad that the Australian superannuation system is so complex tax and benefit wise that advice is needed at retirement....and others manage to get a share of your super payout.

    If you have worked all your life and been paid monthly or fortnightly, and are accustomed to managing that lifestyle then why at retirement are you expected to manage a lump sum, bigger than anything you have received in your lifetime, and make it last for an unknown future lifetime ?

    Let’s hope that when the Govt publishes the recent enquiry, that the system is geared to lifetime incomes.
    Migrant
    MJ
    20th Sep 2020
    11:40am
    I am sure there are excellent and honest financial planners out there, though even if this group represent fifty percent of those practicing ( which I doubt) , it is a high risk selection to make.

    If one can accrue more than adequate retirement funds ( at the very least a Million + for every $50k of your combined Annual spend- ( & this number to accrue just got higher over the last six months of Covid) at least your financial plan can focus on a relatively conservative & diversified investment return strategy that minimizes the high risk.

    The key factor to know if you dont use a financial advisor is what it costs you to live annually now taking EVERY factor into account e.g. car replacements, house maintenance, xmas & birthday gifts etc etc so you dont underestimate your annual spend now and with inflation & spending changes what it will change to in coming years.
    casey
    20th Sep 2020
    11:41am
    My brother in-law is a highly educated man. He done a comsec course and decided to manage his own finances. He done so badly and lost so much money, he now keeps all his money in Term Deposits at his wife's insistence. My theory is if you are sick you go to a doctor , toothache go to a dentist. Everyone has a position in life. I have had a financial advisor for the last 8 years. Don't get any pension or government handouts. Live solely on my super. After 8 years we have more money in our super and investment accounts than we did 8 years ago. We have nice holidays, don't scrimp. For my wife's 70th birthday I bought her a new car. Just keep a close eye on your investments, I keep a monthly record and have had no reason to complain.. I have better things to do with my retirement than chase stocks etc. So what if my advisor takes fees, he has to live, and it does not seem to affect my financial status.
    Greg
    21st Sep 2020
    11:43am
    After 8 years?? You do realise in that time the market had gone up quite dramatically. Pure luck in your time frame.
    Aussie
    20th Sep 2020
    11:58am
    Last time i use a financial planner recommended to me by the commonwealth bank cost me $3,000 for mistakes in calculations and incorrect information .... since my best financial planner has been Microsoft spreadsheet and I am my own planner very very successful for more than 10 years ..... this planners are a total ripoff ... so my anwser is No way in the world I ever use a F Financial Planner
    cupoftea
    20th Sep 2020
    12:18pm
    As I have said before I have kept a tally of every thing I spend Daily for the last 5yrs last year it cost me $40000 so I add 0.5% for Cpi and I know approx. What it will cost for next year and I can work out approx.my super for the next 15yrs not adding interest to it, I can drink and be happy for many a year
    Youngagain
    21st Sep 2020
    11:28am
    Too expensive, and they have vested interests or specific preferences. We used an adviser for a time and made no money. We wanted to invest in real estate and gold but he was adamant that we must invest in shares and balanced funds. If we'd gone the way we wanted, we'd have doubled our money. As it was, we just covered his fees and a living allowance less the OAP.

    He was honest and a very nice person, and came highly recommended with excellent credentials. I had no qualms about his integrity. He just didn't like real estate or precious metal investments and guided us away from them - to our detriment.
    Youngagain
    21st Sep 2020
    11:30am
    I might add that before meeting him, I went to one attached to NAB whose advice we ignored. Had we followed his advice, we'd have been broke within a year, but he charged a hefty fee which NAB, many years later, refunded with admission that he was dishonest.
    Greg
    21st Sep 2020
    11:54am
    If you have some understanding of finances just read ALL the info available online, so many resources today to be very knowledgeable and arrange your investments the best way to get the best return which includes the Aged Pension if you're eligible.

    Obviously some people just have no idea, I get that, and those people should see someone to structure their investments the best for them.

    If anyone is thinking a financial planner can magically find the right place to invest and get 10,15% returns you are just kidding yourself. They CANNOT see the future, just like every other person in the world, it's not possible. They will come up with a plan that MAY, again MAY get great returns and if you tell them you know nothing and are very conservative they should put a plan in place that fits that criteria. That will mean small gains (probably) but much safer.

    I know many people think a financial planner somehow knows how to get massive returns, but that is just not the case.


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