Posts in Retirement Planning
How our Financial System is Not Serving You
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In wake of the banking royal commission, we really got a rude shock: Australians are not being taken care of with regards to their financial advice needs.

However, are we partly to blame? Clients who invested their super entirely in cash (via AMP) and had fees taking out more than it grew (as found in the Royal Commission) were ill advised, no doubt about that. But analysts and university professors argue that as consumers we must become more financially literate and more aware of financial risks and rewards.

One business school professor in this article claims that too many Australians cannot work out simple math calculations, with regard to percentages.

Complexity plays an even bigger part. A 2017 survey by ASIC revealed that around a third of respondents said dealing with money was stressful or overwhelming. Perhaps that’s why they come to a financial professional in the first place; it is fairly complex after all.

‘Fees for no service’ have passed many of us by, and it continues to be a point for investigation in the royal commission. The reason it has thus far been ignored is because an unfair administration fee is merely a line item on a super statement or insurance account. It does not highlight itself in yellow and say ‘look at me, I’m robbing your nest egg’.

So it is a great idea to keep in touch with the advisor who first gave you some life insurance or super allocation advice, to see if your funds are still on track to meet your objectives, among other reasons.

Luckily, when you are aware of your lifetime goals and know your risk tolerance, you can then go along to an accountant at Team Accounting to get a broad outline of the steps you can take... or perhaps the financial structure you might need. This is such a safe step because accountants cannot legally give specific investment product advice.  

Then, if you do want a proper financial plan, a financial advisor who is not affiliated with any particular big fund, i.e. one who charges a fee for service, could be the next step to help plan your financial future. You might as well receive a decent service for the fees you ultimately pay in the line of saving for retirement or insuring your life.

Don't Let a Misstep Curb Your Retirement Fun
Those retirement years. Picture: Pixabay. CCL.

Those retirement years. Picture: Pixabay. CCL.

On the way to planning our retirement, some of us take a misstep because we trust the words and hype of someone offering investments. 

Whether it be mortgage debentures that fold, time shares/hotel clubs, off-the-plan developments that sink once bought, or just plain scams, a setback like this can cost you many thousands. Losing part of your nest egg is emotionally devastating as well as detrimental to your level of comfort whilst retired. 

There is a simple rule you can use to prevent this pain. It's as simple as asking yourself: "is this decision powered by fear or greed?"

These two enemies of wealth will both get you in trouble - you may be torn between hope and doubt in an effort to save more for retirement.  

There is always the option to seek the opinion of a licensed financial planner and, if hovering over a contract, also a solicitor.

When you want tax advice, you might need your accountant to calculate cash flow, but if you want an opinion on the actual investment itself - then only financial advisers with a RG146 can help you, under the law. We have several here, from the team at Lifetime Wealth Partners

This step of asking for advice can give you much-needed time to do your due diligence. You can find out what the investment is -- when your mind is not caught up in exciting visions of compounding growth or lazy beach holidays. (Incidentally, many of those holiday club apartment time shares make shockingly poor investments.)  

No matter what pretty graphics or strong growth projections are parried about, it is important to take time to remove caught-up emotions and ensure any new investment is based on solid fundamentals, like a history of growth, steady dividends, not too much debt, and good management. 

What if You've Been Burned Already?

If you've already taken the plunge and bought a dud investment, try not to let it spook you from all forms of share investing, property investing, or other funds. Not all are created equal.

If the Royal Commission had you worried, then Noel Whittaker advises you to become engaged in your Super again, understand the fees, and use it for the growth and wealth-building tool it can be. (See Courier-Mail, 2 July).  

And if you want a holistic look at your retirement and wealth goals, it might pay to get a financial plan with a licensed financial adviser. Twenty years or so out from retirement is ideal because your family has time to change things in the right direction and ride out the blips of a downturn.