Why you may still need a financial adviser

Yes there are dodgy financial advisers, but not all are bad.

Why you still need a planner

In the wake of recent revelations at the financial services royal commission, it could be logical to assume most planners do not have their clients’ best interests at heart. You might, therefore, decide not to work with a financial professional to maximise retirement income.

But there are really strong reasons why this is an unwise response to the scandals that have been unearthed. Yes, it is true that thousands upon thousands of Australians have been adversely affected by poor advice, and thousands more have paid for services never delivered.

But the headlines about the bad apples are not sufficient reason to conclude that all planners are corrupt, or that seeking financial advice is a bad idea. On the contrary, the experience for our members tells us the exact opposite:

  • Sixty per cent of YourLifeChoices members have visited a financial professional to discuss or plan their retirement, according to the most recent YourLifeChoices Insights research (6665 responses to 45 questions)
  • Of those who had seen an adviser, 34 per cent found the visit “very helpful” and 37 per cent found it “helpful”. This 71 per cent positive result underscores the value of financial planning both in and for retirement.

Below are five other key reasons to visit a planner. But before you go, to ensure you are picking the best person for your needs, budget and long-term goals, be sure to read our article, Get tough with your planner. Often, doing your homework will pay rich dividends, and since you are discussing your long-term retirement income, this is one such situation.

Why you could benefit from financial planning advice:

  1. You don’t know what you don’t know.
  2. The less you have, the more valuable advice can be.
  3. Are you an expert in the big three: tax, superannuation and Centrelink rules?
  4. Are you sure you are maximising your Age Pension entitlement?
  5. Are you one of the 81 per cent who are concerned they will outlive their money?

You don’t know what you don’t know.

Seriously. We often hear retirees declare that they are very financially literate and so are the best people to fully manage their own financial affairs. And in a small number of cases, this is no doubt true. But the fact is, we really don’t know what we don’t know. So it is highly likely a change in entitlements, government legislation, superannuation reporting requirements, taxation levels and a wide range of investment returns may slip by, unnoticed, by an individual. Meanwhile, a financial professional will be at his or her computer every day reading alerts about what has changed or is set to change. Financial services and government regulation are dynamic, not static, areas of activity and only ongoing study will keep you fully informed in order to make decisions about your retirement income.

The less you have, the more valuable advice can be.
We often hear pre-retirees and retirees say, ‘Oh I don’t have enough to worry about’. But let’s flip that argument on its head. Let’s assume you are a single woman who is planning to retire and you have the median super balance for your gender at retirement – $36,000.

You may well believe that is such a small amount, you will not benefit from advice as you will qualify for an Age Pension. But there is a case to be made that it is worth at least an initial discussion with a planner to see if there are ways of making more of your small nest egg.

t may be that the timing of your retirement will affect the level of your pension, and the way you draw down or invest this nest egg might mean an increase of three or four or five per cent. These numbers matter when you are on a limited income. And it is worth remembering that although Centrelink Financial Information Services Officers are not able to give financial advice, they can help you get your head around the myriad rules governing retirement income. 

Are you an expert in the big three: tax, superannuation and Centrelink rules?
You may be strong in one or two aspects of retirement income rules and regulations, but few people are fully informed across all three – and throw in property law and estate planning and it is highly likely you need assistance in one or more of these subjects. So why risk the overall health of your hard-earned dollars by assuming you know all the strategies to maximise your income for the next 20 or 30 years?

And even if you consider yourself wealthy, surely it’s better to make the most of what you have, so you can continue to pay for private health insurance, travel, treat the grandkids and cover later aged care costs?

Are you maximising your Age Pension entitlement?
The Centrelink application form, when printed, runs to 25 pages, with little assistance to understand the information you are being asked to provide. Many people apply online and literally cross their fingers that they have reported accurately. Others wait in a queue at a Centrelink office. Still others join the long line waiting on the phone. Given the complexity of assets and income limits, it is definitely worth your while to fully understand all implications before your fill in your application. A qualified professional, whether accountant or adviser, is often your best friend at this time. 

Are you one of the 81 per cent who are concerned they will outlive their money?
|YourLifeChoices’ financial literacy survey revealed two sorry statistics:

  • 56 per cent of respondents occasionally or frequently run out of money before Age Pension payday
  • 81 per cent are concerned they will outlive their savings.

If you are one of the people worried your savings might not last, this is likely to be causing financial stress. Life in retirement should not be spoilt by ongoing financial concerns, so the first and best step is to fully understand all your options and whether you are properly maximising your assets, be they cash, superannuation, private savings or super.

Most of us feel better when we know the facts of a situation, and when it comes to money, this is almost always true.

What about you? Do you go it alone when it comes to retirement income planning or do you agree that a professional is needed to make the most of your savings?


    Note: YourLifeChoices is an independent website with no affiliation to any financial services organisations. It does not endorse any financial planner, and suggests that all individuals fully research a planner’s qualifications and performance before becoming a customer. 

    Disclaimer: All content on the YourLifeChoices' website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness with regard to your circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances. Financial comments provided by readers cannot be relied on as professional advice, but as general comments only. 


    To make a comment, please register or login
    29th May 2018
    all very nice, but how to find an financial adviser who is not only honest and working in your own best interests, as well as value for money. I did see an adviser and for $2000 they would put in place a rather simplistic plan that I could put in place without assistance for free.
    29th May 2018
    Exactly, the big question is - where do you find a decent FA who works for you and is value for money?
    29th May 2018
    I have had a financial advisor for the last 7 years. In that time after drawing a pension for my wife and myself every month, our initial amount of super has increased substantially. Also our investment portfolio has seen a huge increase. We meet with our advisor twice a year. At the end of every month I download our financial position, print it off and compare to the previous month. When I compare it to our position 1,2, 3 years previous I am more than happy. My theory is if you are sick you go to a doctor, teeth go to a dentist, car playing up go to a mechanic. Everyone has a place in this life. I have skills and have done well, however I know if I tried to handle my own finances I would come a cropper. I am lucky to have scored a bloke who has done so well for me over the last few years.
    29th May 2018
    It's the "...lucky to have scored a bloke who has done so well for me over the last few years" comment that is at the heart of my issue. You need to be 'lucky' to find someone who works predominantly in your interests. How did you find your guy?
    29th May 2018
    I did a lot of research before retiring and decided after consultation with our superannuation adviser that we were better off drawing all our super out and looking after ourselves. The adviser asked what we had saved in the bank and said it would go into an income stream at which I realized all they wanted was our money. Trust was lost at that point having spent 50 years getting what we had in the bank just so they could give us our own money back when it suited them and pay for the privilege as well. I trust one person and that is the person I married. We are fine as we are.
    29th May 2018
    We may not know what we don't know, but we sure as hell do know what we have learnt.

    I ran one of the properties owned by Telford Property Trusts. That division did well, but most of their properties could not come close to earning the promised returns. The management started paying promised returns out of new investment.

    Yes they ended up ion prison, & thousands of retirees ended up broke, as some greedy adviser had recommended the high commission paying Telford Trusts. With that bit of experience I can see current advertising that is just too good to be true. Some advisers must be recommending them, or they wouldn't be in business long. If it looks too good to be true, you can bet your nest egg it damn well is.

    My parents used advisers twice. The first time the recommended trust went belly up. They did get their money back, but over 5 years, with no income for that long.

    The second time, not so lucky, they lost about 20%.

    Don't be greedy looking for exceptional returns, & avoid advisers at all costs. If you can't do it yourself, & have to trust anyone, make it Centrelink. They won't maximise your income, but they wont loose your nest egg either.
    29th May 2018
    Centrelink CAN NOT advise you on investment strategies, they only advise you on Centrelink policies and rules.
    29th May 2018
    That’s true, but too many Financial advisors purport to understand the Centrelink rules when they don’t. The Centrelink financial advisors will explain the rules correctly before you make costly mistakes which stop you receiving the OAP.
    29th May 2018
    I’ve paid two financial advisors and while they had great computer programs and modelling, both were keen to push me in a certain direction.The first who I was forced to see by my employer when I was made redundant actually questioned me wanting to pay off the mortgage before investing. The GFC would have wiped us out I’d followed this advice
    29th May 2018
    There is also free advice available from your Super Fund and Centrelink. I’ve found this advice to be impartial.
    Old Geezer
    29th May 2018
    I have been looking for a financial advisor for many years now so that my family have someone they can trust if the worst should happen to me. I haven't found anyone that comes anywhere close to what I want in a financial advisor. I am actually surprised at the little most actually know about investing.
    29th May 2018
    To give your own advice back to you - don't leave anything behind, just spend it, then you don't need to find a FA!
    29th May 2018
    I went looking for a FA many years ago and found most to be in the class of Used Car Salesmen. I decided to educate myself and completed the Financial Advisers diploma through Deakin Uni. It took me 4 years online and cost me nearly $4K in fees.
    Part of the course required me to contact 3 FA's and evaluate them against recognised best practice. I went to 6 as I could not believe how poor the advice from the fist 3 was, but even the next 3 were just as bad. In the past 8 years I have only found 1 that I would recommend to a friend.
    If you think the Banking RC is exposing criminal behavior, wait until they start to look at this Industry.
    29th May 2018
    Good call Kaye.
    I thought I was pretty good in most of the above but a visit to a seminar convinced me that the small help I need is actually a whole make over to fix up the mess I created.
    We have done well but could have set up retirement much better. At least we'll get the estate side sorted and rejig a few of the investment products we have set up. Should be good when done and I strongly suggest readers seek help well BEFORE they retire to make sure they do not shoot themselves in both feet. I have one foot which should heal (sic) and glad I made the move.
    30th May 2018
    I got advice before retirement and it was appallingly BAD advice. Thankfully, I ignored it or I'd be broke. I later filed a complaint about the adviser who was recommended by a NAB bank employer, worked out of a NAB building, had NAB on his business cards and a NAB name plaque on his desk - and NAB claimed he was independent and they were not responsible for anything he did!!!

    Avoided advisers for many years and when I finally went out and found an honest one (I think!) it was too late to set myself up optimally for retirement and I found I'd lost countless thousands in C/link entitlements. Then when I did optimize for the OAP, the arsehole LNP changed the rules, so I went back to work. Now I have an adviser I think is very honest and ethical, and he's a genuinely nice guy, but I don't think I'm getting very good returns and I feel uncomfortable with his advice. He may be honest and well-meaning, but I don't think he's particularly skilled.
    30th May 2018
    Do you 'need' a financial advisor if you don't have any super or other income stream? Of course not. All you need to do is keep a keen eye on your pension and keep from overspending.

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