The ageing population keeps throwing out challenges to our society, not the least of which is how to fund a reasonable lifestyle in retirement without relying solely on the aged pension. With superannuation rules in a constant state of flux, there is a growing realisation that changes to legislation or eligibility rules can be introduced at any time, affecting plans to build wealth for retirement.
Navigating these changes requires up-to-date knowledge of financial products and government legislation including the tax treatment of income from investments. It also requires the skills to make decisions now that will not cause regret in the future. This is a huge responsibility for the average person on top of existing work and family commitments.
The complexity of the rules and the large volume of investment opportunities available have made it impossible for someone with a reasonably sized portfolio of property, shares, cash and superannuation to do anything more than leave everything where it is. While this is understandable under the circumstances, it is a dangerous approach to take. Markets can change rapidly, tax breaks come and go, cash languishing in bank accounts at low interest rates offer little return and opportunities go begging.
These are all compelling reasons for engaging the services of a financial planner. This is an entirely different role from that of an accountant, although accounting firms such as Carbon Group can offer their clients access to a certified financial planner. The decision to take up that offer always rests with the client.
Financial planners provide an extensive range of services concentrated on building and protecting future wealth. Their clients usually have multiple needs such as advice about superannuation, insurance, investments, wealth planning and succession planning. For the client, having these multiple needs met by the same financial planner is very convenient.
With everything integrated into one investment strategy the client gets a better overall result, as the effect of decisions made in one area can be considered and balanced against how they could impact on a different area.
However, there are a couple of things to consider before engaging someone to manage your precious and hard-earned assets. Firstly, do not confuse a financial planner with a financial advisor. A financial advisor is a broad term used to describe any professional giving advice about finances, which can include a financial planner. Not everyone needs the full range of skills of a financial planner.
The difference lies in a person meeting the certification requirements of the Certified Financial Planner Board of Standards, Inc. before they can call themselves a certified financial planner. This is important because, secondly, you are trusting someone whom you most likely do not know, to make investment decisions on your behalf.
Certified financial planners have a fiduciary duty to act for the benefit of the client. They have a legal and moral responsibility to put client needs and interests ahead of their own. If your affairs are such that you need a financial planner, there is an added degree of security in knowing that they have additional expertise, and no conflicts of interest when looking after your assets.
If you find yourself in need of a certified financial planner, talk to us and we can arrange a referral to our preferred financial planner