FINANCIAL PLANNER


For GenX (born between 1965 and 1980) it's important to make the last 10-15 years of your working life COUNT!


"Just 17 per cent of Generation X use an adviser, but they hold 36.2 per cent of Australia’s superannuation assets".

GenX are a quieter group that needs attention. TRUST is the biggest issue.


Over the years I have interviewed a few financial planners (FP), maybe 6-8. The ones that really resonated with me were the planners who could offer options on their feet and engage with you and your specific needs. Some will freely give you little nuggets of advice and I really liked that. When the whiteboard started getting full with possible scenarios it's like music to my ears. They get what I am asking for and they have a plan for my needs.



I have always believed you do your own research AND interact with people who are in the profession. You can book an appointment with a FP and the first 1 hour consultation is free. You can usually work out in that time frame if you want to go any further. 


I have had FP services where you do not pay anything upfront BUT they do get their fee via commissions / trailing commissions they receive from the insurances and funds they recommend. I have used such a FP and it was really good, however as I have increased my own financial awareness and understand a hell of a lot more, I LIKE the idea of PAYING for the service as a fee upfront and then anything we arrange, such as insurances, mortgages, funds have any commissions or yearly trailing commissions refunded to me.  This assists with covering the cost of the service fee to the FP. I would also prefer an independent FP from any Superannuation Funds or banks planning teams.

I have done this for refinancing our mortgage and am about to look into doing the same for our life insurances and income protections.

Your upfront cost may feel like a lot (service fee) but overall it's not AND you have all the numbers out in the open.

With our mortgage, I used www.irefund.com.au to refinance and each year I will receive approx. $1400 pa from the trailing commission that the bank would normally pay the broker (based on a $1.2m loan). 

Life insurance can be 25-30% of your premium each year and that can be huge, especially when you move into the 40-45 year old range!


QUESTIONS I ask a potential Financial Planner


  1. Who is your typical clientele? What is their age group?

  2. What percentage of clients were in the same phase of life? This is extremely important now because the last 10-15 years before retirement require things to be set up correctly for maximum benefit. Eg: no taxes once retired or getting the best use of gross income in these last 10-15 years of your working life.

  3. Do you charge a fee for service? 

  4. Do you refund upfront and trailing commissions?

  5. Our strategy is XYZ, how do you normally approach this type of strategy? 

  6. How many times a year would we review this strategy and in what format?

  7. I sometimes even ask what their own personal portfolio is like (I have had one show me his portfolio and his reasons why which helped with the trust!)

  8. Another way, which is so much easier these days, is listening to them on their podcasts or reading their book. Checking out their Instagram/Facebook can be useful too, to see how they interact with different kinds of posts on social media.



I am currently working on the initial strategies with Money Over 50 Financial Planners who have a great podcast MoneyOVER50







CURRENT JOURNEY

Our current journey is at a crossroads and I have the following questions coming up now and need advice and assistance with a plan of action:

  • Is our SMSF the best strategy for us? If not, when should we move it?

  • How much do we need to invest to get to $5m by 2028?

  • Should we start salary sacrificing and what else?

  • Where should we invest the employee contributions? Super FUND , EFTs or SMSF fund managers? Should the money flow through the SMSF or direct to commercial fund?

  • Do we change our Life/TPD insurance (currently $700k insurance cover)? 

Also

  • Should we have trauma and income protection? 

  • How to keep the premium as low as possible but be protected for peace of mind

  • What should we calculate as our life insurance?



FIRST MEETING


Our first meeting with our Financial Planner was a one hour consult over zoom. Explaining our goals and where we are now, then what strategies they felt we could work with to get to our goal.

Some tough decisions to make on previous strategies that are set up, but that may not work for long-term goals. 

  • Sell SMSF investment property

  • Salary Sacrifice (SS) 15.5% of salary so total going into Super will be 25% pa. Invest in low fee fund that is stretched across world companies as aggressive for the first 8 years. Last 2 years, have risk proportioned so that 3 years income is held in cash. OR something like that!

  • New questions have come up ... what is carry forward concessional contribution – tax refund? There is a potential to obtain additional tax refunds 

Fees are per annum. 

  • 1st year is 2% of the current balance of superannuation

  • Subsequent years is 1% of superannuation balance

For us, this would be $7,200 for the first year, with a 15% tax rebate due to being under our superannuation account. I am interested to see how much savings on insurances and wholesale superfunds we will be able to offset this investment with. More to follow when we lock in this new strategy ... stay tuned!